Property investors are returning to the market in force, with tight rental conditions and falling mortgage rates fuelling activity nationwide, according to REA Group’s PropTrack Terri Scheer Investor Report.
The report, sponsored by leading landlord insurer Terri Scheer, found that investor activity has picked up strongly across most of Australia, with investors now making up around their highest share of new lending since 2017.
“The number of new investor loans has risen solidly in the past two years, after a quieter period when the RBA started raising rates,” said REA Group senior economist Angus Moore (pictured). “This means investors are now making up a substantial share of new lending.”
Rental markets remain extremely constrained, with rents climbing rapidly and yields rising over the past year.
“Rental market conditions remain very tight, and rents have grown rapidly in recent years. That’s likely encouraging investors to buy in,” Moore said.
Vacancy rates have dropped further, while gross rental yields have increased. Across Australia, more than 90% of investment properties sold in the past year achieved a price higher than their purchase cost – one of the strongest results on record.
“With markets expecting at least one further rate cut by the Reserve Bank and challenging rental market conditions persisting, strong investor activity is likely to continue over the rest of this year and next,” Moore said.
SQM’s figures also show national combined rents rising 0.8% in the month to September and 4.8% year-on-year, taking the national average to $655 per week. Domain’s quarterly update points to early signs of stability, with combined-capital rents holding at $650 per week — the first pause in six years for Sydney house rents.
The report highlights that investing in housing has become increasingly common over the past four decades. In the 2022–23 financial year, 14.1% of tax filers reported rental income – up from just 4.1% in 1978–79.
Investment is also concentrated among higher-income and older households. Nearly 28% of households earning above $225,000 invest in property, compared with just 6.5% among the lowest income quintile.
Meanwhile, seven in 10 property investors are aged between 35 and 64, while the share of investors aged over 60 has nearly doubled since the early 2000s – from 14% to 27%.
Among those who do invest, two-thirds own one property, while one in five own two.
Investor demand remains strong in inner Sydney and Melbourne, as well as surrounding affordable regions, where rent growth and population inflows continue to support returns.
The combination of record-low vacancy rates, lower financing costs, and stable price growth is creating renewed opportunities for long-term investors and landlords.
“With more than 90% of investment properties selling for more than their purchase price, the current market conditions could present a lucrative opportunity for property investors,” said Terri Scheer executive manager Carolyn Parrella.
“As Australia's leading landlord insurance specialist, Terri Scheer is committed to supporting property investors in a dynamic market.”
For mortgage brokers, the PropTrack Terri Scheer Investor Report points to rising investor lending and renewed demand driven by falling mortgage rates and sustained rental shortages.
With vacancy rates anchored at 1.2% and rents still edging higher in most capitals, brokers should calibrate servicing and pre-approvals using local lease evidence and vacancy data.
Stable rent growth and lower borrowing costs are improving investor serviceability, but market segmentation by region remains key.
As the RBA approaches another potential rate cut, investor interest is expected to stay strong into 2026, particularly across capital city and affordable regional markets.
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