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Victoria leads investor lending growth
Investor lending has surged to record highs, driven by NSW and Victoria, while owner-occupier growth lags, highlighting strong investor demand for existing homes and diversification strategies.
Investor lending has hit a new record, with 205,533 loans issued nationally over the past year, marking a 9 per cent increase from the previous peak in June 2022, and up 26.4 per cent since 2021.
Over the year, Victoria led investor lending growth with a 12.9 per cent increase, while NSW and South Australia followed, each exceeding 10 per cent.
Data showed that investors’ strong presence was seen nationally, with owner-occupier lending growing by just 2.7 per cent annually, with the strongest gap between both being the highest in NSW and Victoria by nine percentage points.
Money.com.au’s property expert, Debbie Hays, said that investors have been more cautious and favouring existing builds.
“Rather than chasing a single strategy, investors are diversifying across property types. That’s typically a sign of a mature market, where buyers are balancing yield, future growth, and development potential,” Hays said.
“Some are prioritising immediate rental returns through existing stock, while others are positioning for future supply shortages by buying land to build on or hold.”
NSW
NSW’s investor market has surged to new highs, with investor loan numbers climbing to a record 62,501 after annual growth of 10.5 per cent, making it one of only two states, alongside South Australia, to reach a new peak.
Since 2021, investor lending in the state has expanded by 16 per cent, led by strong activity in established homes, where investor lending rose 13.2 per cent over the year, far outpacing the 2.7 per cent growth seen among owner-occupiers.
Demand has remained broad-based, with loans for existing dwellings, construction and land all hitting record levels, signalling sustained investor confidence across multiple segments.
At the same time, NSW owner-occupier borrowing has also set a new benchmark, with the average annual loan size surpassing $800,000 for the first time, reaching $812,644, up 6 per cent from a year earlier despite already high price levels.
While NSW continued to lead with the largest average home loan sizes, other states have been catching up as property prices rise more quickly.
For both owner-occupiers and investors, growth in the rest of the country has been outpacing that in NSW, narrowing the gap in average loan values compared with previous years.
Victoria
Victoria has emerged as the strongest-performing state for investor lending, with loan numbers jumping 13 per cent annually to 47,732, up 9 per cent from the previous year.
The surge has been fuelled by investors targeting established homes, with lending for existing dwellings climbing 19 per cent annually to 36,363 loans.
“This momentum is narrowing the gap with Queensland. In the most recent quarter, Victoria issued 695 more investor loans than Queensland, although Queensland still holds a narrow annual lead of 364 loans,” Hays said.
Data showed that if the state recorded another solid quarter, Victoria would be in a strong position to overtake Queensland and reclaim second place in the national investor lending rankings for the first time in several years.
Queensland
Queensland continues to stand out as one of the nation’s strongest owner-occupier markets, with lending growth comfortably outperforming the national trend.
While owner-occupier loans rose 4.6 per cent over the year, well above the 2.7 per cent national average, investor activity lost momentum, increasing just 7.9 per cent.
“Rather than expanding portfolios, investors are increasingly doubling down on existing properties,” Hays said.
Lending for home alterations and refinancing has reached record highs, with 47,339 loans issued across the two categories, signalling a growing focus on upgrading existing homes and managing debt amid intensifying affordability pressures.
At the same time, Queensland has pushed past 48,000 investor loans for the first time since June 2022, maintaining its position as the nation’s second-largest investor market.
However, Victoria is rapidly closing the gap, trailing by just 364 loans, setting the stage for an increasingly tight contest between the two states.
Hays said that Queensland may be entering a steadier phase of the property cycle, with investor demand supported by major infrastructure and the lead-up to Brisbane 2032.
South Australia
South Australia has been outpacing the national market in home loan growth, with owner-occupier lending rising 3.5 per cent annually, while investor lending was up 10.1 per cent.
The state has been particularly strong in new housing, leading the nation with 56.6 per cent growth in owner-occupier loans and 25.2 per cent growth in investor loans for new builds.
SA has been the only state to hit a record high in investor loans for new dwellings, issuing 467 loans, while one in eleven owner-occupier loans are now for new builds – well above the national average of one in sixteen.
Hays said that the combination of robust construction activity and strong buyer demand makes South Australia a standout market for both new dwelling investment and owner-occupied housing.
“Stronger affordability and the relatively stable price environment in South Australia are making it easier for buyers to build instead of compete for existing homes.”
Western Australia
Western Australia was the only state to see owner-occupier lending fall over the past year, dropping 1.6 per cent to 40,758 loans, driven by a 32 per cent slump in new-build lending while established home loans edged up 1 per cent.
Investor activity has also stalled, with annual growth flat after hitting 10 per cent, suggesting the market may be approaching saturation amid high prices.
Investor loan volumes peaked in December 2024, with capital increasingly flowing to NSW and Victoria.
The shift has reduced Western Australia’s share of national investor lending from 12.8 to 12.2 per cent, even as overall investor lending across the country reached record highs by September 2025.
