National loan volumes expected to rise despite rate hikes and investor tax uncertainty
Australia’s housing loan market is expected to expand in 2026, with investor lending forecast to outpace owner-occupier activity despite rising rate pressure and renewed focus on investor tax settings.
Money.com.au’s State-by-State Mortgage Insights Report projects national housing loan volumes rising 7% in 2026 to 594,279 loans. On current growth rates, investor lending is forecast to increase 13% to 246,598 loans, while owner-occupier growth is expected to ease to 3% as higher borrowing costs bite.
Source: Money.com.au
The report notes two 0.25 percentage point cash rate increases have already been delivered this year, with further rises anticipated, alongside market speculation about possible changes to the capital gains tax discount and limits on negative gearing.
In New South Wales, total lending is forecast to rise about 9% in 2026, with investor lending expected to climb 16% to 77,470 loans. Owner-occupier lending is projected to grow 4%. The December 2025 quarter was the state’s strongest quarterly outcome since December 2021, with 25,033 loans issued, up 13% year-on-year. Even so, NSW continues to lag Victoria in owner-occupier volumes, with 85,808 annual loans compared with Victoria’s 98,856 in the 12 months to December 2025.
The report also points to strong land-loan growth in NSW, with owner-occupier land loans up 14% and investor land loans up 25% over the past year. NSW’s share of new investor loans nationally has risen to 31%, its highest proportion since March 2022.
Victoria is forecast to approach NSW in total lending in 2026, with volumes projected to reach 166,345 loans, leaving it about 300 loans behind NSW if current trends persist. Total lending in Victoria is expected to rise around 10%, making it the fastest-growing large state by the report’s measures. The increase is attributed mainly to a rebound in investor activity, with investor lending up 21% over the past year versus 4% growth in owner-occupier lending.
Money.com.au said Victoria has regained second place from Queensland in investor market share. It also remains the largest owner-occupier market, with 98,856 loans issued in the year to December 2025, just short of 100,000. Victoria recorded 13,048 more owner-occupier loans than NSW over the period, while NSW still leads Victoria in investor volumes by 14,712 loans.
“Melbourne’s relative affordability compared to other capital cities is drawing investors back, while also generating renewed interest from owner-occupiers and first-home buyers,” said Debbie Hays (pictured right), property expert at Money.com.au.
“Victoria remains one of only two states yet to exceed its 2022 investor loan levels, which suggests there’s still significant room for growth as the market continues to recover.”
Queensland’s lending market is expected to grow more slowly in 2026, with total loans projected to rise 4% to 128,034. That includes forecast growth of 2% in owner-occupier lending to 74,856 and 6% in investor lending to 53,178. Investor lending in Queensland rose 8% over the past year, below the gains reported for NSW and Victoria, while owner-occupier lending increased 3% and total volumes reached their highest level since the year to December 2022.
South Australia is forecast to track broadly steady conditions, with owner-occupier lending projected to rise around 3% and investor lending 6% in 2026. The report highlights stronger movement in loan sizes, with the average loan above $600,000 in both segments and the average investor loan size rising 13% year-on-year to $603,838, around $69,000 higher than a year earlier.
Western Australia is projected to be the only state to record a fall in lending in 2026, with total volumes expected to decline by about 1%. The forecast includes a 2% drop in owner-occupier lending and a 0.3% dip in investor loans. The report links the pullback to a cooling after several years of strong growth and notes WA was also the only state to record a year-on-year decline in lending in 2025, driven by a fall in owner-occupier loans.
Tasmania is forecast to post the fastest investor growth rate, albeit from a smaller base. The report projects total lending rising 18% to 11,297 loans in 2026, with investor lending up 30% over the past year. Investor volumes remain limited in national terms, with 2,819 loans representing 1.3% of new investor lending across Australia. Owner-occupier lending rose 13% over the past year to 6,785, accounting for 71% of new loans in the state.
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