Australian property investors are re-entering the market in force, with lending to investors climbing to its highest level in nearly a decade, according to new data from REA Group’s PropTrack Terri Scheer Investor Report.
The report, released on 16 October and sponsored by landlord insurance specialist Terri Scheer, shows investors are accounting for one of the largest shares of new housing loans since 2017.
The trend follows two years of steady growth in investor lending after a lull during the Reserve Bank’s rate rise cycle.
Investor strength returning
REA Group Senior Economist Angus Moore said the combination of easing mortgage rates and persistently tight rental markets is helping to sustain investor interest.
“The number of new investor loans has risen solidly in the past two years,” he said.
“Rental market conditions remain very tight, and rents have grown rapidly in recent years. That’s likely encouraging investors to buy in.”
He added that expectations of at least one further rate cut, coupled with limited rental supply, are likely to support continued investor activity into 2026.
Rents rising, vacancies low
The report notes that rental demand remains high and vacancy rates have continued to fall, pushing gross rental yields higher.
Nationally, more than 90 per cent of investment properties sold in the past year achieved a higher price than their purchase price – around the highest proportion on record.
Inner Sydney and Melbourne, along with their surrounding suburbs, remain popular investment markets, while more affordable regional areas are also attracting buyers.
Who’s investing
The data shows property investment is most common among higher-income and middle-aged Australians.
About 28 per cent of households earning more than $225,000 a year (the top income quintile) hold an investment property, compared with just 6.5 per cent of households in the lowest income group.
Seven in ten investor households are aged between 35 and 64.
The share of investors over 60 has nearly doubled since the early 2000s, rising from 14 per cent to 27 per cent.
Among those who do invest, two-thirds own one property, and one in five own two.
Long-term rise in investor ownership
Property investment has become more common over the past four decades. In the 2022–23 financial year, 14.1 per cent of tax filers reported rental income, up from 4.1 per cent in 1978–79.
Terri Scheer Executive Manager Carolyn Parrella said the findings point to a buoyant environment for investors.
“With more than 90 per cent of investment properties selling for more than their purchase price, the current market could present a lucrative opportunity,” she said.
