Australia’s property investor borrowing rises at fastest rate in a decade – despite interest rate rises

Bank loans to Australian investors grew by $42bn in the year to March, a 9.6% increase and the fastest rate since September 2015, the RBA says. Photograph: Joel Carrett/AAP

Property investor borrowing rose at its fastest rate in a decade in March, according to the Reserve Bank, despite higher interest rates and speculation about property tax changes.

Owner-occupier loan growth slowed under the weight of growing mortgage costs but investor lending is continuing its record surge.

Bank loans to Australian investors grew by $42bn in the year to March, a 9.6% increase and the fastest rate since September 2015, according to the central bank’s statistics.

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Investors borrowed a record near-$43bn in 2025 as interest rates fell and home prices surged.

Loans to owner-occupiers rose only 6.2% in the year to March, slowing since December as interest rates pushed buyers out of the market. Auction clearance rates have dropped to below 60% and price growth has slowed.

Loan Market, a mortgage broking company saw first home buyers’ applications drop by a third after a brief bump after March’s rate rise. Investor applications, meanwhile, are higher than they were at the start of the year.

Beau Cook, a Loan Market broker in Richmond, Sydney, said he would typically have about one investor for every four owner-occupiers applying through his branch.

He now has four investors for one first home buyer.

“It’s completely turned on its head in the last three months,” Cook said.

ANZ and NAB have each reported investors accounted for more than two-fifths of their new home loans in the six months to March, continuing a steady rise.

The banks have also given early signs interest rate rises could put property out of lower-income earners’ reach.

NAB on Monday reported people earning less than $200,000 a year accounted for about 10% of applications for investor loans in the six months to March, down from close to 15% the year prior.

A rising share of investors with ANZ and NAB have taken out interest-only loans, which have smaller short-term repayments but leave the borrower saddled with bigger long-term debt.

Madeline Dunk, an ANZ economist, says a rate hike is likely on Tuesday and that markets expect another by year’s end, meaning investors will become more constrained

“I do expect you’ll see investor housing credit slow,” she said.

“We’ve seen that drop-off in activity in the housing market [and] a lot of that will be driven by slowing in investor activity.”