Adam Empringham,
Director of Sales at Image Property.
Investor confidence rises as market momentum builds
Australia’s property investors are back – and they’re buying with renewed confidence.
Over the past 18 months, new investor loans have surged, nearing levels not seen in almost a decade. With tight rental markets, rising yields, and more favourable interest rate expectations, it’s not hard to see why investor activity is picking up across the country.
Investor Lending Nearing Record Highs
According to realestate.com.au’s January 2025 Residential Audience Pulse Survey, new loans to investors have risen steadily since mid-2023. This marks a significant recovery after the pause caused by rate increases in 2022 and early 2023.
What’s driving the uptick?
– Rental markets remain tight: vacancy rates are low in many areas
– Rental yields are climbing: boosting return potential
– Interest rates are easing: improving borrowing conditions
South-East Queensland in particular is standing out. Brisbane, the Sunshine Coast, and the Gold Coast are attracting high investor interest due to:
– Strong population growth and internal migration
– Major infrastructure investment
– Affordable entry points compared to Sydney and Melbourne
– High rental demand in lifestyle-driven suburbs
Investors Are Leading the Recovery
While owner-occupier lending has seen moderate growth, investor lending has rebounded more sharply. In some smaller states, the proportion of investor loans has reached levels not seen in over 20 years. Nationally, the share of loans going to investors is at its highest since 2017.
This suggests confidence in the rental market and a belief that the worst of the rate cycle is behind us.
It’s not just about timing the market – investors are stepping in to position themselves ahead of continued rental growth and future capital appreciation.
Different Patterns Emerging Across States
Investor behaviour is not uniform across Australia, and that’s where the opportunity lies.
In South-East Queensland, investor momentum continues to grow. The combination of affordability, lifestyle appeal, and strong rental demand is drawing investors from both interstate and abroad. Suburbs in Brisbane’s middle ring and coastal hubs like Mooloolaba and Burleigh Heads are seeing particularly high interest.
Meanwhile, in Victoria, investor activity has remained more subdued. But this creates a different kind of opportunity. Melbourne’s property prices are now lower than those in both Adelaide and Brisbane, and rental affordability remains strong.
That affordability, paired with falling interest rates and stabilising policy settings, may create an opening for investors looking for long-term potential in one of Australia’s largest capital cities.
Rental Demand Is Reshaping the Market
One of the main drivers of investor re-engagement has been the state of the rental market.
– Vacancy rates are low in most cities and regional areas
– Rent prices continue to grow, though at different paces across the country
– Tenant demand is strong, with population growth adding pressure
In Victoria, for example, rental growth has been more modest – keeping it one of the most affordable states for renters. While this may have tempered investor interest in the short term, it also positions Melbourne for a potential rebound as yields improve and supply tightens.
Meanwhile, markets like Brisbane, the Sunshine Coast, and parts of Adelaide are experiencing rapid rental increases, which is underpinning rising investor activity.
What This Means for Property Investors
The outlook for 2025 is shaping up to be favourable for both new and returning investors. Whether you’re looking to grow a portfolio, start your first investment, or re-enter after some time out of the market, conditions are aligning – with softening interest rates, strengthening rental yields, and ongoing capital growth potential, particularly in high-demand suburbs. In addition, affordability gaps between states are creating unique entry points.
Looking to make the most of current conditions in South-East Queensland? Chat with our experienced team for tailored guidance based on your goals and preferred locations.
Or if you’re ready to take action now, get in touch with us and let’s talk through your next move.
The outlook for 2025 is shaping up to be favourable for both new and returning investors. Whether you’re looking to grow a portfolio, start your first investment, or re-enter after some time out of the market, conditions are aligning – with softening interest rates, strengthening rental yields, and ongoing capital growth potential, particularly in high-demand suburbs. In addition, affordability gaps between states are creating unique entry points.
