Australia’s Investor Market Is Heating Up – But Some States Are Turning Up the Heat Faster Than Others

If you’ve been following the property markets closely, you’ll know investor activity has increased.

But the latest figures from Money.com.au’s Mortgage Insights report confirm just how widespread, and strategic this resurgence is.

We’re not just seeing more investor loans; we’re seeing investors target very specific markets, asset types, and growth corridors.

And as always, the smart money follows fundamentals, not fear.

The big picture: investors are back in force

Over the past year, investor loans jumped 22% nationally, with 192,843 new loans issued.

That’s more than triple the growth rate of owner-occupier loans, which edged up by just 6%.

According to the report, projections suggest we could see over 234,000 investor loans issued in 2025.

That’s a massive number and it tells us that, despite higher interest rates, tighter serviceability, and economic noise, investors are confident.

Why?

Because they’re looking through the short-term noise to the long-term opportunity.

This is textbook countercyclical investing.

NSW: Record investor activity, and a shift toward new builds

Data from the report show that New South Wales is leading the charge, recording the highest share of investor loans in the country—41.7% of all new loans in the state last year.

That’s up from just under 30% at the end of 2020.

Interestingly, the sharpest growth has come from investor loans for newly built properties, which soared 34% year-on-year.

These also had the highest average loan size in the state—$872,306 compared to $827,099 for established homes—reflecting rising build costs, but also investor appetite.

According to Money.com.au’s Property Expert Mansour Soltani, NSW investors are increasingly drawn to new estates in regional corridors—areas offering better bang for the buck.

He said:

“We’re seeing more housing density in regional areas outside Sydney, where new estates are offering strong opportunities for investors who want to avoid overcapitalising.

At the same time, a significant number of first-home buyers are also opting for these developments as part of their rentvesting strategy.”

This aligns with what we’re seeing on the ground: demand for quality new housing in regional growth nodes is rising—both from investors and rentvestors chasing affordability and future capital growth.

Victoria: Playing catch-up, but tax policies are biting

For the first time in two years, investor loan growth in Victoria has caught up with owner-occupier lending, with both rising 10% year-on-year.

But that headline hides a more nuanced picture.

Yes, construction loans are up 22% and lending for existing dwellings increased 9%.

But loans for new housing among investors dropped by 20%.

That’s a clear response to Victoria’s harsh tax environment.

As Mansour Soltani bluntly puts it:

“Victoria is the most heavily taxed state in the country when it comes to property.

It has the highest stamp duty of all states, and land taxes on investment properties and second homes are among the most expensive.”

These high upfront and holding costs are pushing many investors away to lower-cost states like Queensland and Western Australia.

Despite its population growth and economic weight, Victoria risks losing investor capital if the policy doesn’t shift.

Queensland: From lifestyle hub to investor favourite

Queensland continues to rise as a powerhouse for investors.

According to the report, it recorded 26% growth in investor loans last year—totalling nearly 46,000—and now sits just behind NSW in overall investor volume.

Investor loans now make up 40% of all new loans in the Sunshine State, nearly double what they were four years ago.

Growth is broad-based:

And this isn’t just about lifestyle appeal anymore.

Soltani explains:

“The Sunshine State is shedding its lifestyle-only reputation and emerging as a serious hotspot for property investors.

We’re seeing strong growth in loans for land, construction, and existing homes.”

Queensland’s affordability, strong migration, and improving infrastructure make it an attractive market, particularly for interstate investors priced out of Sydney and Melbourne.

WA: The underdog making serious moves

Western Australia posted the strongest investor loan growth in the country—up 35% year-on-year.

That’s nearly 60% higher than the peak of the last lending cycle.

What’s most interesting is the diversity of that growth:

WA also saw the largest jump in average loan sizes for both owner-occupiers and investors showing rising confidence in the market.

South Australia: Investors stepping in where owner-occupiers retreat

South Australia also saw a strong 22% rise in investor loans, reaching a record 13,685.

But here’s the catch—owner-occupier loans have dropped sharply and are now 33% below their September 2021 peak.

Investor loans now make up nearly 40% of all loans for existing properties.

This reflects broader affordability constraints—owner-occupiers are hesitating, while investors with stronger borrowing capacity are taking up the slack.

This is a key sign of how affordability is reshaping the market. Investors are often more nimble, and right now they’re moving quickly where others won’t.

Tasmania: Still behind the curve

Finally, Tasmania remains the slowest state to recover from the 2021 lending peak.

Total loan numbers are still 28% below that high watermark, and investor loans account for just 26% of the market—the lowest of all six major states.

Growth is occurring but at a much slower rate.

For now, the smart money appears to be focusing elsewhere.

What should investors take away from this?

There are three key insights:

1. Momentum is back in the investor segment—especially in new builds, regional corridors, and markets with favourable policy settings.

2. State policy matters. Victoria’s harsh tax regime is clearly deterring investor interest, while states like QLD and WA are benefiting.

3. New money follows new opportunities. From regional NSW to suburban Perth, investors are targeting growth corridors where infrastructure, affordability and tenant demand align.

And as always, timing the market is less important than buying the right asset in the right location.

If you’re serious about taking advantage of the current market dynamics, now is the time to get strategic.

At Metropole, we help our clients cut through the noise and make data-driven investment decisions that stand the test of time.

About Joseph Ballota
Joseph is a Property Coach who put hundreds of people on the road towards wiping away their mortgage in under 5 years through expert Property Investment Plans.