What's driving buyers to change their property priorities?
Investment property demand has surged across Australia, with the value of investment loans climbing 26% year-on-year as homeowners increasingly view property as a wealth-building strategy.
Nearly half of existing homeowners (45%) cited investment as their main reason for purchasing their next property, up from 42% in the previous quarter, according to Mortgage Choice’s latest Home Loan Report.
“Homeowners’ growing appetite for investment property is reflected in our home loan submission data,” said Mortgage Choice CEO Anthony Waldron. “Australians aren’t just buying homes for their lifestyle, they’re buying them for long-term financial gain.”
Western Australia led the investment loan surge with a 33.7% year-on-year increase, followed by New South Wales and the ACT at 32.3%. Investment loan values rose across every region during the June quarter.
The trend reflects a broader shift in property purchasing behaviour, with different generations adopting strategic approaches to homeownership. One-third of Generation Z buyers cited property as a strong investment strategy as a top reason for purchasing.
“Falling home loan interest rates and a tight rental market continue to drive demand for investment property,” Waldron said.
Investment properties in growth corridors and regional areas are attracting buyers seeking manageable entry points with potential for rental income and capital gains, the report found.
Beyond investment motivations, homeowners looking to purchase subsequent properties cited needing a bigger place (22%) and wanting improved features and amenities (19%) as key drivers. Living closer to the CBD (15%) and securing better work-from-home environments (14%) also influenced decisions.
The investment surge comes as refinancing activity accelerates, with refinance loan values rising 22.4% year-on-year following recent interest rate cuts by the Reserve Bank.
South Australia and the Northern Territory recorded the highest refinance growth at 28.6% year-on-year, as borrowers sought better rates on existing loans.
The data, based on Mortgage Choice submission data and a survey of 1,000 Australians, indicates a maturing property market where buyers increasingly view real estate through an investment lens.
“As Australians take a more considered approach to buying property, the case for expert guidance from mortgage brokers is critical,” Waldron said, noting the complex decisions involved in property investment strategies.
