Investor Market Shifts

Investor lending remained a major force in Australia’s property market in the March quarter, with investors accounting for 40.3% of new housing finance by value — the highest share since 2016.

However, market conditions have shifted since that data was recorded. The federal budget, proposed changes to negative gearing and capital gains tax, and updated lender serviceability policies have created a more complex environment for investors.

While total housing loan commitments fell 6.2% in the March quarter, investors pulled back less sharply than owner-occupiers, highlighting the strength of demand at that point in the cycle.

Conditions now vary widely across the country. Melbourne and Sydney are facing more price pressure, while Brisbane, Adelaide and Perth are expected to remain more resilient.

The national market remains fragmented, with investors becoming more selective and focused on fundamentals such as rental demand, vacancy rates and long-term growth prospects.