With investors comprising over 40% of new loan commitments, Bluestone compels brokers to unlock clients’ borrowing power
If you needed a reminder of the exponential growth of the Australian property investor market, non-bank lender Bluestone Home Loans’ latest Investor Insights for Mortgage Brokers report is a good place to start.
Combining data from the Cotality and the Australian Bureau of Statistics, the report highlights that new investor loan commitments outpaced owner-occupier commitments by a whopping 600% in the September 2025 quarter.
Rental growth continues to climb, although yields have been squeezed by faster-than-average house price appreciation.
Average change in dwelling values, Cotality Monthly Housing Chart Pack, November 2025
“At 41% of mortgage demand, we haven’t seen investors comprising this much share of the market since the final quarter of 2016,” said Tim Lawless (pictured, right), Cotality’s executive, research director. “Similarly, credit growth for investment housing is rising at the fastest pace since December 2014. Clearly investor confidence remains strong across the housing market despite stretched affordability and relatively low rental yields.”
New loan commitments, ABS Lending Indicators, September Quarter 2025
All markets aside from the ACT are outpacing 10-year averages, with the Northern Territory and Western Australia particularly bullish.
The NT takes the crown for the highest proportion of property investors at 44.2%. It simultaneously has the lowest entry price with an average loan of $433,000, 36% below the national average of $686,000.
2026 headwinds
High inflation and the looming threat of interest rates hikes pose undeniable risks, noted Lawless, as does the prospect of credit tightening.
APRA has already made moves on the latter with its limits on high-risk lending, effective from 1 February. “It seems likely that APRA will be on alert for any further rise in investor credit growth or a pickup in household debt levels which could trigger further credit policy adjustments for ADIs,” said Lawless.
Like other market analysts, Lawless doesn’t expect house growth in 2026 to match 2025 levels, but with supply still short and listing persistently low, he doesn’t expect prices to go into a decline any time soon.
Read more: 2025 was a knockout year for house prices – just don’t expect the same in 2026
Nonetheless, “the real opportunity for brokers lies in being a true partner – one who can deliver an approval when others may only see complexity”, said Bluestone’s chief commercial officer Tony MacRae (pictured, left). “It’s about unlocking borrowing power for clients who don’t fit the traditional mould, finding solutions to complex scenarios and helping to bring their property ambitions to life.”
SMSFs: Small but sophisticated
Self-managed super funds represent a small but powerful slice of the property investor market.
With just $28 billion in borrowings, “the superannuation property investment market may be small, but what it lacks in size is made up for with its client base of sophisticated and active investors”, said Bluestone. For mortgage brokers to add value to this segment, they need to understand the loan structure (a limited recourse borrowing arrangement), regulatory limitations (such as not borrowing to improve the property) and the ongoing compliance and reporting framework.”
“SMSF lending is a chance to really prove your worth to high-value clients,” added Richard Chesworth (pictured, centre), Bluestone’s head of specialised distribution. “When you can provide the right guidance, you can become an indispensable part of your client’s finance network, sitting alongside their accountants, planners and advisers.”
Regardless of the client category, delivering a successful client solution “requires not just an understanding of their serviceability, but a deep understanding of their current portfolio, requirements and objectives”, said Bluestone. “Brokers can explore unique ways to structure loans that align with investor goals, with loan terms impacting cash flow and equity release providing opportunities for portfolio growth.”
Unions call for end to tax breaks
This recent growth in investor lending has led to calls to put an end to investor tax breaks to help balance the market more fairly for owner-occupiers.
In a new submission to the Select Committee on the Operation of the Capital Gains Tax Discount, the 60,000-member Australian Manufacturing Workers’ Union (AMWU) has called for the removal of the CGT discount on investment properties, grandfathered in over a two-year period.
“This would signal to the market that housing is not an asset to be used for wealth accumulation,” said the AMWU.
The union also called for an end to negative gearing, which allows property investors to offset investment losses against income tax. The AMWU has also criticised government-backed supply-side policies like the 5% deposit scheme, instead calling for a rent-to-buy scheme.
The Australian Council of Trade Unions’ (ACTU) has also proposed to limit negative gearing tax breaks, a proposal slammed by Liberal senator Andrew Bragg as “absolute garbage”.
