Falling interest rates and low rental vacancies appear to be driving a resurgence in property investors seeking mortgages. 

And the uptick doesn't appear to be over yet, according to a new report from PropTrack and Terri Scheer.

The report notes that any further RBA rate cuts – broadly expected in late 2025 or early 2026 – would likely encourage even more investors into the market.

Investor lending reaches eight-year high

"The number of new investor loans has risen solidly in the past two years, after a quieter period when the RBA started raising rates," REA Group senior economist and report author Angus Moore said.

"This means investors are now making up a substantial share of new lending."

The number of new investor loans written (excluding those being refinanced) is typically considered a yardstick of the number of investors buying new properties,

Of all new loans written for property purchases in the three months to June, 38% were taken out by property investors, as per ABS data.

That represents nearly 50,000 loans worth close to $33 billion combined.

Read more: The average mortgage size in Australia

The portion of new loans being written to investors in June quarter was just shy of the September 2024 peak – the highest level in nearly eight years.

"Rental market conditions remain very tight, and rents have grown rapidly in recent years," Mr Moore said.

"That's likely encouraging investors to buy in."

Investors appear to be favouring particular states, with investor lending subdued compared to 2017 levels in NSW and Victoria and reaching record highs in the Northern Territory.

Inner city areas, particularly those in Melbourne, are also drawing the eye of investors, according to PropTrack, likely due to high rental demand.

Investors are also targeting inner-city hubs such as Melbourne, where rental demand is high, along with more affordable growth corridors like Melbourne's Wyndham, Sydney's Blacktown, and Brisbane's Ipswich.

Property investors realise near-record-high capital gains

While more investors appear to be entering the market, those exiting their investments are realising the highest rate of profitability in around a decade.

More than 90% of investment property sales saw sellers walk away with more than they originally paid over the past year.

Increasing sale proceeds are underpinned by rising property prices, particularly in the smaller capital markets, according to the report.

Property prices are hitting record highs around the country, with only Melbourne, Hobart, and Canberra realising median prices below all-time highs at the end of September.

See also: Median house prices around Australia: October 2025

Prices in the mid-sized capitals – Brisbane, Adelaide, and Perth – rose between 77% and 83% over the five years to September, according to the latest Cotality data.

Image by Nathan Hurst on Unsplash

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