New research shows property loans taken out by investors grew 22% in 2024, more than 3 times the pace of new lending to owner-occupiers.
Victoria’s relative affordability saw the southern state lead the nation with the strongest growth in owner-occupier loans.
The data is contained in the latest Mortgage Insights report from financial comparison website Money.com.au.
The details
515,116 new loans for dwellings were issued across Australia in 2024 — up 11% on the previous year.
Money.com.au’s Mortgage Insight report says this amounted to $331 billion in new mortgages.
Even though Bureau of Statistics figures show the number of new investment loans fell in the December quarter (after adjusting for normal seasonal patterns), Money.com.au says the actual number of loans rose 13.3% to 50,573 — an increase of 5,939 loans compared to the same quarter in 2023.
This is still 7% below the record high of 54,100 loans in December 2021 (when interest rates were still at pandemic lows), but in dollar terms, the December 2024 quarter set a new record, thanks to a rise in average loan values.
The Mortgage Insights report says the average investor loan size grew 3.9% for the December 2024 quarter and 7.9% over the year to $674,316.
Overall, there were 192,843 investor loans written in 2024, up 22% from 2023, and more than three times the 6% growth in owner-occupier loans, with a more even spread of investors across Australia’s states and territories.
Victoria saw the strongest annual growth in owner-occupier loans, up 10% year-on-year.
This could be due to a large number of first-home buyers purchasing former investment properties, with a large number of landlords selling up in Victoria because of new state government taxes and charges and new laws governing rental property standards.
However, Money.com.au's Property Expert, Mansour Soltani, says Victoria also remains one of the most accessible property markets.
“Property prices have stayed relatively steady in Victoria, making it one of the best-value markets in the country right now,” Mr Soltani says.
The Mortgage Insights report shows Queensland continues to solidify its position as Australia’s second-largest investor market behind New South Wales, accounting for 23.8% of investor loans in 2024 — 1.7% more than Victoria.
Coming off a much smaller base, the Northern Territory saw the largest percentage increase in investor loans, jumping 40% year-on-year, with many investors drawn to high rental yields currently on offer in some parts of Darwin and Alice Springs.
Loans to first-home buyer loans increased by 6.1% over 2024.
There was a slight decline towards the end of the year, but Mansour Soltanit says this will change in 2025.
“We've had our first rate cut in nearly five years, and more are expected in 2025, which will boost borrowing power,” he says.
“Additionally, the ‘Bank of Mum and Dad’ is in a stronger position than ever to help with deposits or act as guarantors, as rising property prices have boosted their home equity.”
Interestingly, the Money.com.au data shows the gap in loan sizes between first-home buyers and other owner-occupiers has widened.
Average loan sizes for owner-occupiers (excluding first-home buyers) increased by 31% over the full year.
The data trends suggest that, with interest rates at 13-year highs, many first-home buyers in 2024 may have made compromises on their “dream” or “forever” home, instead settling for housing in more affordable areas.
It also shows that many owner-occupiers who have built up substantial equity in their homes during the large lift in dwelling prices since the onset of Covid may have been in the process of “trading up” to bigger properties or more expensive suburbs.
The Mortgage Insights report also says that competition in the home loan market picked up in 2024, with a rebound in refinancing and a small increase on the discount offered by financial institutions on new variable rates.
“In September 2024, new owner-occupier rates were 0.07% lower than outstanding rates, and investor rates were 0.11% lower,” the report says.
“As of December 2024, the gap has slightly widened to 0.08% for owner-occupiers and 0.12% for investors.
“This shows lenders are gradually offering more competitive rates on new loans compared to existing loans, and borrowers might be more motivated to refinance to take advantage of lower new loan rates.”