Property investor borrowing in Australia rose at its fastest rate in a decade in March, according to the Reserve Bank of Australia (RBA), despite higher interest rates and speculation about property tax changes. Owner-occupier loan growth slowed under the weight of growing mortgage costs, but investor lending continues its record surge.
Record Growth in Investor Loans
Bank loans to Australian investors grew by $42 billion in the year to March, a 9.6% increase and the fastest rate since September 2015, according to the central bank’s statistics. This surge comes even as the RBA has hiked interest rates twice already this year, with economists predicting another rate rise on Tuesday.
Investor Confidence Remains Strong
Alannah Comer and her partner, Sydney-based investors who bought on the city’s northern outskirts in December, exemplify this trend. Despite understanding that rates and market conditions would change, they decided to proceed with their purchase. Their property has already risen in value, and they are not deterred by potential capital gains tax reforms rumored in next week’s budget. Comer even plans to purchase another property in coming years, stating, “It’s still kept the momentum and people still need to buy and sell.”
Shift in Borrowing Patterns
Loans to owner-occupiers rose only 6.2% in the year to March, slowing since December as interest rates pushed buyers out of the market. Auction clearance rates have dropped below 60%, and price growth has slowed. In contrast, investors borrowed a record near $43 billion in 2025 as interest rates fell and home prices surged.
Mortgage broker Loan Market saw first home buyer applications drop by a third after a brief bump following March’s rate rise, while investor applications are higher than at the start of the year. Beau Cook, a broker in Richmond, Sydney, noted a dramatic shift: “It’s completely turned on its head in the last three months.” He now sees four investors for every one first home buyer, compared to a previous ratio of one investor for four owner-occupiers.
Bank Lending Trends
ANZ and NAB have each reported that investors accounted for more than two-fifths of their new home loans in the six months to March, continuing a steady rise. However, there are signs that interest rate rises could put property out of reach for lower-income earners. NAB reported that people earning less than $200,000 a year accounted for about 10% of investor loan applications in the six months to March, down from close to 15% the year prior. Additionally, a rising share of investors with ANZ and NAB have taken out interest-only loans, which have smaller short-term repayments but larger long-term debt.
Economic Outlook
Madeline Dunk, an ANZ economist, expects a rate hike on Tuesday and another by year’s end, which will likely constrain investors. “I do expect you’ll see investor housing credit slow,” she said. “We’ve seen that drop-off in activity in the housing market, and a lot of that will be driven by slowing in investor activity.”
