Property investor borrowing is growing at its fastest rate in a decade, even as rising interest rates push owner-occupiers out of the market.
Bank loans to Australian investors grew by $42 billion in the year to March – a 9.6% increase and the fastest rate since September 2015, according to Reserve Bank statistics.
The surge continues a record year for investor lending. Investors borrowed close to $43 billion in 2025 as interest rates fell and home prices climbed.
Meanwhile, loans to owner-occupiers rose only 6.2% over the same period, slowing since December as higher mortgage costs bite.
Auction clearance rates have dropped below 60% and price growth has eased.
The shift is playing out dramatically at the broker level.
Beau Cook, a Loan Market broker in Richmond, Sydney, says the change has been stark — and puzzling.
“Historically, majority of our business is first homebuyers and the occasional upsizer,” he said.
“But in the last five months, that has completely turned around.”
According to Mr Cook, first home buyer applications dropped by a third after a brief bump following March’s rate rise. Investor applications, meanwhile, are higher than at the start of the year, a trend he describes as “very unexpected.”
He says the motivations differ across client types.
For first home buyers turning to investment properties, affordability and fear are the main drivers.
“A lot of them will be living at home, they’re not in a rush to move out,” he said.
“But they would like to get into a property off the back of seeing what’s happened with house prices in the last two to three years. There’s a bit of FOMO that property prices might climb again.”
On the other side, established owner-occupiers with equity are seizing what they see as a window of lower competition.
“They’ve always been planning to buy an investment property,” Mr Cook said.
“Competition’s a bit lower at the moment, and they’re looking to take the plunge now.”
The Reserve Bank has acknowledged the imbalance, noting in its latest policy statement that while owner-occupier lending has increased, it has done so at a much slower pace than investor lending.
The central bank flagged concerns that investor activity is playing a disproportionate role in driving property prices and broader economic conditions.
APRA introduced new lending restrictions in February, limiting banks to issuing only 20 per cent of new loans to borrowers with debt levels of six times their income or higher.
In the regards to the Federal Budget, the regulator has indicated the measures may not significantly reduce investor borrowing on their own.
“Whatever’s announced, I think it will have a big impact on confidence and decision making for a lot of people,” he said.