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Rotating capital: Investors flock to Victoria amid new growth phase
New data showed capital has been rotating nationally, with Melbourne seeing a significant rise in investor acquisitions, while withdrawals surge in Western Australia’s and Queensland’s booming markets.
The latest FOUNDIT Investor Index compared data from December 2025 to February 2026 with the same period last year, tracking properties that had sold in the previous 12 months before being listed as rentals.
FOUNDIT’s head of research Kent Lardner said yield compression in Perth and parts of Queensland appeared to have reduced investor incentive, while Victoria’s price softness had restored value perception.
According to the data, Victoria’s strongest investor-acquisition gains occurred in house-dominated markets with larger land components and relatively affordable entry prices.
Latrobe Valley saw the highest gains at 71.7 per cent, followed by Wallan at 47.9 per cent, Casey-South at 42.6 per cent, and Wyndham at 32.0 per cent.
“The uplift is not centred on high-density inner-city apartments. It is concentrated in family housing corridors where yields remain comparatively resilient, and replacement cost underpins pricing,” Lardner said.
“This indicates investors are rotating back into suburban detached stock rather than speculative CBD unit product.”
In comparison, Western Australia experienced the largest investor withdrawal nationwide.
Data showed that transactions in the Mid West dropped by 75.5 per cent, Armadale by 56.6 per cent, and Wanneroo by 50.7 per cent.
Lardner said all suburbs with the largest declines were house-oriented outer metropolitan and regional markets, showing incremental capital into the housing markets had slowed significantly.
However, he said investors in Western Australia were also retreating from apartment stock, with Perth City recording a 33.3 per cent decrease in transactions.
“The data suggests Western Australia has transitioned from rapid expansion to consolidation, particularly in land-backed outer suburbs that led the cycle,” Lardner said.
Similarly, Queensland recorded substantial declines in investor transactions, with Townsville seeing a decrease of 55.9 per cent, Gladstone transactions falling by 49.0 per cent, and Brisbane Inner recording a decline of 51.4 per cent.
According to the data, the decrease varied across property types by suburb.
While detached housing historically dominated investor transactions in regional resource centres like Townsville and Gladstone, the findings suggested investor appetite had been reduced by yield compression.
Meanwhile, in Brisbane Inner, the decline was found to be more apartment-focused, with investor acquisitions in the CBD and inner-ring unit stock cooling substantially.
Larnder said the dual pattern of falling house activity in regional areas and reduced unit turnover in Brisbane Inner showed a state-wide moderation.
“This dual pattern – falling house activity in regional SA3s and reduced unit turnover in Brisbane Inner – indicates a state-wide moderation rather than a single asset-class adjustment,” Lardner concluded.