Market shifts east; investor activity nears 2022 peak
Investor lending in Australia is closing in on owner-occupier volumes, with the latest Money.com.au Mortgage Insights report revealing a shift in buying patterns and a rise in refinancing activity.
The report, which analyses lending trends for the year to June 2025, shows that investor loans increased by 12% over the period, despite a slowdown from the previous year’s 19% growth. Owner-occupier lending, meanwhile, rose by 4%, down from 6% a year earlier. First-home buyer activity remained unchanged, recording no annual growth.
A total of 521,671 loans were issued in the year to June 2025. If current trends continue, this figure is expected to reach 551,261 by December 2025.
Queensland led the major states in owner occupier loan growth, up 7% – almost twice the national average. Smaller jurisdictions also saw notable increases, with Tasmania up 13%, the Northern Territory 10%, and the ACT 8%. In contrast, Western Australia recorded no growth for the first time since June 2024.
“We’re seeing early signs of buyer activity shifting from Western Australia, which is becoming a saturated market, back to the Eastern seaboard states,” said Debbie Hays (pictured), property expert at Money.com.au. “As interest rates come down, more buyers will re-enter the market, but many will be pushed into smaller states and territories where affordability and supply are less constrained.”
Lending for new property construction continues to decline. Loans for new dwellings fell by 8% in the year to June 2025, following a 1% decrease the previous year. Construction loan growth slowed from 9% to 3%, while land loans dropped from a 2% decline to a 5% fall.
Owner-occupier lending has shown a modest recovery since the post-pandemic low, rising 9% from March 2023 to June 2025. However, volumes remain 29% below the June 2021 peak, when interest rates were at historic lows.
“The recovery in owner-occupier loans shows confidence is returning, but a return to peak levels will take time, with supply still constrained and borrowing costs remaining elevated,” Hays said. “Further interest rate cuts will bring more home buyers back into the market, but without addressing supply, renewed demand risks pushing prices higher and locking some buyers out altogether,” said Hays.
Investor lending is now close to its 2022 high, with 196,699 loans issued in the year to June 2025. Queensland and South Australia saw the strongest annual growth among the states, both up 16%, followed by New South Wales at 12% and Western Australia at 10%.
“The expectation is that growing investor activity will inject much-needed capital into the housing sector, boost rental supply, and support broader economic growth, particularly once the RBA moves back into a hold position with the cash rate, potentially sometime next year,” Hays said.
The gap between investor and owner-occupier loans is now at its narrowest since June 2021, with investors accounting for 38% of all new lending. The difference in quarterly loan numbers has shrunk from 62% (71,190 loans) in June 2021 to 39% (31,864 loans) in June 2025.
"The split between the two buyer segments will shape both housing affordability and rental supply going forward,” Hays said. “Investors are now taking a larger share of the loan market – traditionally a sign of market confidence and broader prosperity.
“However, the concern from the other side of the fence is that stronger investor demand could make it even harder for owner-occupiers and first-home buyers to compete, pushing prices higher and widening the affordability gap.”
Refinancing activity has also rebounded, with 585,317 loans recorded in the year to June 2025, just below the September 2023 peak. The increase is being driven by borrowers opting to refinance with their current lender, with internally refinanced loans up 31% annually, compared to 2% growth for external refinancing.
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