Australia’s Housing Market Surge Is Driving Investor-Fueled Growth

As house loan approvals rose and the economy recovered, investor activity in Australia's property market shot through in 2025.  Rising property valuations, low rental vacancy rates, and prospects of interest rate decreases have been driving a fresh enthusiasm for real estate among investors.

 Recent information from Money. com. au provides us with a breakdown of exactly how much money this represents.  With 515,116 new house loans granted in 2025 a stunning 11% rise over last year at an increase of $331 billion in mortgages.  Given the matching figure for owner-occupier loans was 6%, the investment segment—which jumps out most—is the one with a 22% rise in loans.  This increasing tendency shows how property investors are seeing possibilities in an environment of shifting economic conditions.

Factors Behind Investor Growth

A combination of factors led to a sharp increase in investor activity throughout Australia’s housing market:

• Property Prices Rising & Greater Equity

The stability and consistent growth of property values have allowed homeowners to use their accumulated equity to make further investments, resulting in an increase in housing market follow-up transactions.

• High Demand, Low Vacancy Rates

Historically low vacancy rates in capital cities combined with high demand for rentals has increased the appeal of investment properties that provide guaranteed rental income.

• Trends in Population Growth & Migration

Australia’s growing population, driven mainly by migration, has heightened demand for housing. This has investor sentiment, especially in markets that are heavy with rentals.

Forming Trends: Queensland Takes the Lead, Northern Territory and Western Australia Soar

Queensland is the second-largest investor market in Australia, having accounted for 23.8% of investor loans in 2025, 1.7% more than Victoria. This is the first time Queensland has overtaken Victoria in investor loans on record. Victoria, meanwhile, saw 42,567 investor loans made over the year, vs 45,872 for Queensland.

Investor Market Drives Growth

Money. com. au property expert Mansour Soltani said this boom had been driven by rising house prices which had increased equity in existing homes for owners wishing to buy other homes. “Given vacancy rates across capital cities are at record lows, rental demand is showing no signs of abating and we’ve got population growth continuing, we’re likely to see the investor market move even further ahead of owner-occupiers, correlating with market conditions that exist in a downward rate cycle in 2025.”

Changing Investor Preferences:

From 82% of all settlements in 2020 to 59% in 2025, New South Wales properties accounted for   New South Wales investors are shifting their focus to Queensland, increasing from 5.31% in 2020 to 14.07% by 2025.

The remarkable 2025 performance of the housing market, particularly in the investor segment, indicates that demand for investment properties will stay strong.   With favourable market conditions and the potential for increased demand in 2025, the investor market will play an important role in determining the housing sector.

The rise in investor loans opens up a unique opportunity for aspiring investors. At OM Financial Services, we have complete solutions for all your borrowing needs. Our team have the requisite skills to help find a solution that suits your financial needs. Ring us at 478 876 967 and Book a consultation to learn more about our services to start your journey towards a better financial future.