New lending data shows the number of new investment loans jumped by 13.6% in the September quarter.
Over the same time, the combined value of new investor loans rose 17.6%.
Official Australian Bureau of Statistics (ABS) figures show investor lending now makes up 40% of all new home loans in Australia, a marked jump from the usual one-third.
ABS head of finance statistics Mish Tan said falling borrowing costs and low vacancy rates have created favourable conditions for investors.
"Strength of lending for investment also pushed the total value of all new dwelling loans to a record high in September," Dr Tan said.
Source: Australian Bureau of Statistics
Regulators are watching
The latest data may prompt regulators to step in to limit investor loans, a move the Australian Prudential Regulation Authority (APRA) made more than a decade ago.
In 2014, investor lending was at similar levels, adding fuel to a housing market upswing that regulators feared raised the risk of an economic downturn on the back of rising debt levels.
At that time, APRA acted to stop lenders from achieving more than 10% annual growth in investor loans.
There are some echoes of the same conditions a decade later, with the latest housing market data showing record home values have seen their highest monthly growth in more than two years.
The Cotality data was the first release since the federal government's expanded 5% Deposit Scheme was launched on 1 October.
House price growth wipes out interest rate cuts for many
Cotality research director Tim Lawless said the pace in price growth had been gathering steam since the Reserve Bank's cash rate cut in February.
Since February, the median home value across the combined capital cities has risen $53,700.
The gain effectively wipes out the boost to median income borrowing capacity from the 75-basis points of rate cuts in 2025, Cotality analysis found.
It also flagged a possible tightening of investor credit policies could be a looming downside risk for housing markets.
Where are investors buying?
The biggest jumps in investor lending occurred in New South Wales (19%) and Victoria (18.5%), with growth recorded in all states and territories.
The two states also led the rise in the number of new owner-occupied home loans which rose a modest 2% nationally over the previous quarter.
The total value of new owner-occupier loans also increased 4.7%.
The latest ABS data does not take in the period since the expanded 5% Deposit Scheme for first homebuyers was launched.
However, it shows the number of first homebuyer loans grew by 2.3% in the September quarter, up a modest 0.9% through the year.
The data also suggests the three interest rate falls in February, May, and August 2025 had sparked a jump in refinance lending, up 18.7% over the same period last year.
But external refinancing activity had flattened in the September quarter, growing only 0.1%.
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| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 5.98% p.a. | $2,978 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.89% p.a. | 5.80% p.a. | $2,962 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.99% p.a. | 6.02% p.a. | $2,995 | Principal & Interest | Fixed | $0 | $0 | 60% |
| Promoted | Disclosure | ||||||||||
5.93% p.a. | 5.93% p.a. | $2,975 | Principal & Interest | Variable | $0 | $395 | 70% | Disclosure |
