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From WA to Qld: Investor loans fuel market recovery
Across Australia, investor and owner-occupier loans remained below pre-COVID-19 levels, with larger loans rather than higher volumes driving the recovery, as Queensland captured the largest market share.
Key trends in Australia’s housing loan market showed that in the year to June 2025, owner-occupier loans remained 19.5 per cent below mid-2022 levels, while investor loans were down just 2.9 per cent.
Money.com.au said the data indicated that borrowing has yet to recover from the post-COVID-19 rate-driven slowdown.
Additionally, the data showed that larger loans are driving the mortgage market recovery, with the average home buyer loan up 8 per cent year on year, double the 4 per cent growth in loan volumes.
Money.com.auʼs property expert, Debbie Hays, said that across the country, the Sunshine State is still the nation’s property hotspot.
Over the year to June 2025, Queensland recorded the highest annual growth in investor loans, with a 16 per cent rise in the number, totalling 47,143 loans issued.
Similarly, the stature recorded the highest growth of 7 per cent in owner-occupier lending, to 71,292 loans.
Queensland also ranked second for construction loan growth at 17 per cent, and a 7 per cent annual growth in lending for existing homes.
Hays said all owner-occupier loan categories have been showing growth, reflecting strong and widespread buyer confidence.
She said Queensland market’s strength was also reflected in the average loan sizes, with owner-occupier loans up 13 per cent to $636,520 and investor loans rising 11 per cent to $616,679, the highest among the eastern states.
“Broad-based strength shows Queenslandʼs growth is not a bubble but rather a sign of genuine, long-term demand driven by population growth, lifestyle appeal and strong economic fundamentals,” Hays said.
In Victoria, data showed the market remained steady, recording modest growth over the year to June 2025.
The state’s owner-occupier loans rose 4 per cent to 94,207, driven by a 7 per cent increase in existing home lending, while land and new-build loans fell, and the average loan edged up 4 per cent to $629,056.
Investor lending in Victoria increased by 9 per cent to 44,178 loans, driven by a 12 per cent rise in existing home lending.
While land and new-build loans fell sharply and the average loan edged up only 2 per cent to $605,491, the smallest gain among major states.
“Victoria is a market where prices arenʼt prone to huge upswings, even in Melbourne, giving home buyers and investors more time to buy and avoid over-capitalising,ˮ Hays said.
According to Hays, NSW remains Australia’s largest market, with the highest average loans: $800,642 for owner-occupiers, up 6 per cent, and $840,938 for investors, up 5 per cent.
Loan growth is concentrated on the investor side, climbing 12 per cent to 58,948, six times faster than owner-occupier lending, while loans for existing homes rose 14 per cent, broadly matching national trends.
“NSW continues to offer strong fundamentals for property investment. Investors who can still meet market prices continue to buy in the state, tightening supply for first home buyers and keeping upward pressure on prices even as home buyer demand stays soft,” she said.
Simultaneously, South Australia drove the nation’s construction lending with new-dwelling and construction loans rising at 25 per cent and 17 per cent, respectively.
South Australian owner-occupier loans rising 4 per cent to 21,736, new-dwelling lending surging 54 per cent, while investor lending grew 16 per cent to 14,111 loans.
The state also posted the second-largest increase in owner-occupier loan size, up 13 per cent to $581,717.
At the other side of the country, Hays said the West Australian market has been cooling down, with home buyer lending flat and investor lending up a subdued 10 per cent.
Yet, Western Australia recorded the highest refinancing growth, with owner-occupier and investor refinancing up 9 and 26 per cent, respectively.
The state also ranked second in the nation for investor land loan growth at 23 per cent and new-dwelling loan growth at 14 per cent.
“WA is a market that’s cooling and consolidating. Home owners are choosing to improve their properties and optimise their mortgages, while some investors are still taking on new debt and chasing price growth while they can,” Hays said.
