Investor borrowing is accelerating at a pace we have not seen for some time.
According to the latest Australian Bureau of Statistics (ABS) lending data, investor loan commitments rose by 12.3% between September 2024 and September 2025. That growth is much higher than that of owner-occupiers, which grew just 1.7% over the same period.
This surge reflects a market environment that favours experienced property investors and highlights a potential window of opportunity for those looking to act now.
What do the numbers tell us?
The ABS data revealed that there were 57,624 new home loan commitments by investors in the September quarter, representing around 40.1% of all new mortgages for that period. This means that nearly two in every five new loans were being taken out by borrowers who already own property and are actively expanding or restructuring their portfolios.
Looking at the state breakdown, New South Wales recorded the highest number of new investor loans, with more than 18,000 commitments. Victoria stands out for a different reason. Over the past 12 months, new investor lending in Victoria increased by 27.2%.
This suggests strong momentum. Investors are not just present in the Victorian market – they are accelerating their activity.
It is also encouraging to look at how investor lending compares with owner-occupier lending in Victoria. As the graph below shows, owner-occupier lending has remained at or slightly below 25,000 loans per quarter since mid-2022, while investor lending has steadily risen.
This indicates that investor confidence is outpacing demand from owner-occupiers, with experienced borrowers leveraging prior capital growth and equity to take advantage of opportunities.
What’s driving investors back to the market?
Interest rate changes
Interest rate movements in 2025 encouraged more market activity. While rates remain elevated by historical standards, the downward trend over the past year has enabled more buyers to participate.
The outlook for 2026 is less certain, with some commentators suggesting the Reserve Bank of Australia (RBA) will increase rates.
Experienced investors, however, focus on the long-term trajectory of loans, rental income and portfolio growth, rather than short-term rate fluctuations.
Tight rental market
Rental conditions continue to support investor confidence. According to Domain, nationally, vacancy rates remain below 1.7% across all capital cities, keeping the balance firmly in landlords’ favour.
In Melbourne, unit rents hit a record $580 a week in the December 2025 quarter, rising $30 over the year. While rental growth has slowed in some cities, rents remain high and competition intense, underpinning long-term income expectations for investors.
Property price outlook
Property prices are expected to continue rising, with Melbourne projected to outperform the national average. Population growth, limited supply and renewed buyer demand are driving upward pressure.
Acting now allows investors to benefit from capital growth from an earlier base, rather than chasing higher prices later. Even modest annual growth over the long term can significantly improve portfolio returns, especially when combined with rental income and structured debt.
Given Melbourne’s slower market over 2024 and parts of 2025, some investors may have already seen this as an ideal moment to enter or expand their holdings before prices accelerate further.
What does increasing investor numbers mean for you?
Rising investor activity signals a more competitive property market. Well-located properties may move quickly, and timing, finance and strategy become critical. Pre-approval, loan structuring and lender choice can make the difference between securing the right property or missing out.
At the same time, growing investor activity reflects confidence in long-term fundamentals: rental income, low vacancy rates and projected capital growth. For established borrowers, this is reassuring. Strategic property investment remains a core tool for wealth building, and positioning yourself amid rising competition is key to maximising outcomes.
Is Melbourne a good place to invest in 2026?
Melbourne offers compelling advantages for property investors. Strong population growth is driving demand for housing across the city. The city’s population is projected to grow by around 1.5% annually over the next decade, placing it among Australia’s fastest-growing locations, according to the latest Centre for Population projections.
This sustained demand supports both rental markets and long-term capital growth.
Economic expansion is also driving opportunity. NAB data showed Melbourne’s CBD was Australia’s fastest-growing area for new business account openings over the year to September 2025, up 12% year on year. Professional services, legal and accounting sectors are booming, while Melbourne’s west is attracting small businesses to support growing local communities.
Finally, projected capital growth in Melbourne’s property market is expected to outpace the national average in 2026, according to several forecasts, improving potential returns and building long-term wealth.
How does AXTON Finance help investors?
At Axton Finance, we understand that you do not have hours to spend comparing bank products or chasing paperwork. Our role is to act as your professional intermediary, managing the entire process from pre-approval to settlement. We analyse multiple lenders on your behalf, structure your loan to suit both your current needs and long-term goals and ensure you can take advantage of opportunities in Melbourne’s competitive market.
Whether you are upgrading your family home or adding to your investment portfolio, we provide tailored advice and a smooth, time-efficient experience.
Ready to take the next step? Get in touch with AXTON Finance today to explore your options and secure your next property with confidence. Call 03 9939 7576, email getabetterrate@axtonfinance.com.au or contact us today.