Western Australia (WA) continues to lead growth in owner-occupier loans, while Queensland (QLD) has become the second-largest market for investor loans, surpassing Victoria.

Money.com.au’s latest Mortgage Insights report highlighted some interesting trends that reflect shifting buyer preferences, tax advantages, and affordability considerations across different states.

National loan growth insights

The average new loan size in Australia has reached $642,121, marking a 7.2% increase over the past year.

For investors, the average loan size is even higher, at $654,056, showing a 7.7% annual rise.

Peter Drennan, Research and Data Expert at Money.com.au suggests that this loan growth reflects renewed confidence in the housing market, likely influenced by lender-driven cuts to fixed rates and expectations of a rate cut in 2025.

This optimism among both homeowners and investors is a sign of resilience in the market, even as affordability concerns persist.

WA’s strong performance in owner-occupier loans

Western Australia has emerged as the top performer for owner-occupier loan growth, with an impressive 9% annual increase.

Victoria is close behind with a 7% rise, showcasing a resurgence in buyer interest.

According to Mansour Soltani, Home Loans Expert at Money.com.au, WA’s growth has been supported by its relatively affordable property prices and the strength of its local economy.

However, Soltani cautions that as interest rates fall in 2025, buyer activity may ramp up again on the eastern seaboard, potentially shifting some focus away from WA as the market there reaches maturity.

Queensland’s growing appeal to investors

In a significant shift, Money.com.au reports that Queensland has overtaken Victoria as the second-largest market for investor loans, holding 23.4% of the national share, slightly ahead of Victoria.

In September alone, QLD recorded 4,593 investor loans—almost 700 more than Victoria.

The appeal of Queensland is multifaceted, with lower property prices, attractive lifestyle factors, and investor-friendly tax settings compared to Victoria, where high property taxes are prompting many investors to seek better returns elsewhere.

Meanwhile, though smaller in volume, the Northern Territory has seen an impressive 50% increase in investor loans year-over-year, according to Money.com.au.

With just 99 loans in September but a notable 14.3% annual growth, the NT stands out for its high rental yields, particularly in Darwin.

Steady growth in first-home buyer loans

The report also highlights the steady increase in loans for first-home buyers, with Victoria and New South Wales leading the pack at 14% and 13% annual growth, respectively.

This surge in first-home buyer activity is a testament to the demand for affordable entry points into the property market.

For investors, understanding these areas of high first-home buyer activity may reveal emerging hotspots where competition and demand are on the rise.

Money.com.au’s research also shows a 25% annual decline in external refinancing, while internal refinancing has increased by 14%.

Drennan notes that external refinancing has slowed due to steady interest rates, which reduces the incentive for borrowers to switch lenders.

However, should the RBA cut rates in 2025, the market may see renewed lender competition and opportunities for borrowers to secure better deals.

Future outlook

Clearly, Australia’s mortgage markets are evolving, with each state exhibiting unique trends that cater to different types of investors and buyers.

For those watching these developments, understanding the broader economic forces—such as the RBA’s cash rate policies and state-specific tax environments—will be crucial in making informed investment decisions.

About Chris Dang
Chris Dang is an accountant by training and has worked in the Financial Planning industry for many years. Chris brings together property, accounting, and financial planning experience to help clients of Metropole Wealth Advisory create a holistic plan for their wealth.