Housing investment lending surges 31.8% year on year as investor activity hits new highs

Article by Alison Cheung Communications Manager 17 February 2026

Investor money flowed strongly into the housing market in 2025, with more buyers chasing stock and competition lifting across many areas. 

New investment loans totalled a record $42.9 billion in the December 2025 quarter, surging by 31.8% compared to a year earlier, according to the latest figures from the Australian Bureau of Statistics (ABS). That’s more than $10 billion in additional lending over 12 months. 

The record borrowing captured market conditions before the cash rate lifted to 3.85% in February 2026. While rates have since edged higher, one increase is unlikely to derail the strong investor demand seen late last year.

Total investment borrowing has accelerated sharply

The growth didn’t happen evenly across the year. 

The shift coincided with the start of the rate cut cycle in February 2025, which made borrowing easier to access for many investors. While lending was relatively steady earlier in the year, momentum built quickly from mid-year. Between June and September alone, lending growth was the highest in 2025, jumping by $6.27 billion, or 18.7%.

Record number of investor loans

It’s not just the dollar value rising. The number of new investment loans hit 60,455 in the December 2025 quarter. 

That increased by 23% compared to a year earlier, marking the highest number of new housing investment loans on record. 

Put simply, more investors are active and they’re taking out more loans. 

Investors are borrowing larger amounts

The average investor loan size has also ballooned. 

Nationally, investors took out an average loan of $717,000 in December 2025, $43,000 (or 6.37%) more than just a year ago. 

NSW continues to record the largest average investor loan at $873,000. It’s the only state where investors have average loan sizes above the national benchmark. 

At the other end of the scale, the Northern Territory (NT) has the smallest average investor loan size at $460,000. 

However, the NT recorded the biggest percentage increase over the past year. Average loan sizes there rose by $63,000, or 15.9%. Western Australia was close behind, with loan sizes increasing by $85,000, or 15.2%, to $644,000. 

Over a longer five-year period, South Australia (SA) stands out. Since December 2020, the average investor loan size in SA has grown by $258,000, or 70.9%, reaching $622,000.

What’s driving the lift?

Part of the increase in borrowing reflects higher property prices in many states.  As values rise, investors feel more confident about the property market while also needing to commit to larger loans to score a chance at buying in a hot market. 

Interest rate settings have also played a role. After a period of higher rates, the three rate cuts in 2025 likely improved borrowing capacity and confidence. For some investors, cheaper finance makes starting or expanding a portfolio more attractive. 

The result is a market where both investor participation and borrowing amounts rose at the same time.

The big picture

While rates now appear to be slowly edging higher again, one rate hike is unlikely to erase the confidence and momentum that built through the second half of 2025. It may cool activity slightly, but the record borrowing suggests widespread confidence and investor momentum heading into 2026 looks to be strong. Time will tell whether gradually rising rates and affordability pressures begin to slow the pace, or whether investors continue pushing ahead.

Disclaimer: The information enclosed has been sourced from the Australian Bureau of Statistics and Cotality and is provided for general information only. It should not be taken as constituting professional advice.      

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