Investor demand is set to outpace owner‑occupier lending even as higher mortgage rates and potential tax changes loom, according to Money.com.au’s latest State‑by‑State Mortgage Insights report.
The Money.com.au report forecasts total home lending to grow around 7% next year to 594,279 loans, with investor loans tipped to rise by 13% to roughly 246,600 based on current trends.
Speculation around changes to the capital gains tax discount and a cap on negative gearing is adding an extra layer of uncertainty for property investors, but so far demand remains resilient.
Owner‑occupier growth is expected to slow to about 3% in 2026 as two cash rate hikes delivered this year and the prospect of further increases weigh on borrowing capacity, particularly for first‑home buyers and highly leveraged households.
The pattern is increasingly state‑driven: NSW and Victoria are pulling ahead on investor activity, Queensland’s growth is moderating, Western Australia is cooling after a boom, and Tasmania is accelerating from a low base.
New South Wales is expected to post around 9% lending growth in 2026, with investor loans doing much of the heavy lifting. Investor volumes are projected to climb 16% to about 77,470, compared with more modest 4% growth in owner‑occupier loans.
The state now accounts for 31% of all new investor loans nationally, its biggest share since early 2022, with strong land loan growth signalling demand for new builds and development sites.
Victoria, however, is closing the gap fast and is on track to almost match NSW as the country’s largest lending market, with total loans forecast at about 166,345 – just 300 short of NSW on current trajectories. Investor lending in Victoria rose 21% over the past year, more than five times the 4% growth in the owner‑occupier segment, helping it reclaim second place from Queensland in investor market share.
Money.com.au property expert Debbie Hays (pictured) said value is a key driver.
“Melbourne’s relative affordability compared to other capital cities is drawing investors back, while also generating renewed interest from owner‑occupiers and first-home buyers,” Hays said.
She added that “Victoria remains one of only two states yet to exceed its 2022 investor loan levels, which suggests there’s still significant room for growth as the market continues to recover.”
Queensland’s lending market is forecast to grow at a slower pace, with total loans expected to rise by around 4% to 128,034 in 2026. Investor lending is projected to increase 6%, well behind the double‑digit gains in NSW and Victoria, while owner‑occupier activity is set to grow just 2%.
“Queensland is losing some of its investor edge, with some buyers increasingly turning to other states offering better value and the potential for stronger returns. That said, the state will continue to draw strong interest from both lifestyle investors and homebuyers,” Hays said.
South Australia and Western Australia present a different challenge for brokers. SA’s loan volumes are stable but average investor loan sizes have climbed sharply, reflecting price growth rather than transaction growth, while WA is tipped to see a small pullback in total loans after five years of rapid expansion in investor lending.
Tasmania, by contrast, is leading the nation for investor growth from a small base. Total lending is projected to jump about 18% in 2026, with investor loans up 30% over the past year yet still only accounting for around 1.3% of national investor volumes.
Get the hottest and freshest property and mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
