Will 2025 Be the Year of the Investor? Mortgage Trends Point to a Shift

Have you noticed that property investors are surging ahead while first-home buyers and owner-occupiers take a backseat?

The latest mortgage trends suggest this gap will only widen in 2025.

With investor loans soaring, refinancing making a comeback, and interest rates shifting, the property market is entering a new phase, and if you’re not paying attention, you could miss out on key opportunities.

Let’s break down what’s happening and why investors are in the driver’s seat.

Investors are outpacing owner-occupiers—by a lot

The latest Money.com.au Mortgage Insights Report reveals that in 2024, investor loans surged by 22% year-on-year, while owner-occupier loans grew by just 6% .

That’s more than three times faster growth for investors.

According to Money.com.au’s Property Expert, Mansour Soltani, investors are leveraging rising home equity to expand their portfolios:

“With vacancy rates across capital cities at record lows, rental demand showing no signs of easing, and population growth continuing, we’re likely to see the investor market pull even further ahead in 2025 as market conditions shift in a downwards rate cycle.”

​In short, the fundamentals are stacked in favour of investors:

• Low vacancy rates mean rents are rising, making property investment even more attractive.
• Falling interest rates (with the first cut already here) will improve borrowing capacity.
• Existing homeowners have more equity, giving them a financial edge to buy again.

And the numbers prove it—192,843 investor loans were settled in 2024, up by 34,234 from the previous year.

Victoria: the homebuyer sweet spot

While investors dominate, homebuyers are still active, particularly in Victoria.

According to the report:

• Victoria led the nation in owner-occupier loan growth, up 10% year-on-year.
• The average loan size in Victoria is $615,175—rising just 2% annually, compared to 16% in WA and 13% in QLD.

Mr Soltani said that this is happening because of affordability.

He further explained:

"Property prices have stayed relatively steady in Victoria compared to other states, so it’s one of the best-value markets in the country right now.

Homebuyers have a rare window to buy something at a more affordable price and in a better location than they would in Queensland, for example."

But this won’t last forever.

If rate cuts continue and demand increases, prices in Victoria could surge, making today’s opportunities much harder to find.

Queensland is now Australia’s No. 2 investor market

For the first time ever, Queensland has overtaken Victoria as Australia’s second-largest investor market.

Data from the report shows that QLD accounted for 23.8% of all investor loans, surpassing Victoria’s 22.1%.

Furthermore, investor loan numbers in QLD hit 45,872, compared to 42,567 in VIC.

Soltani attributes this to affordability and strong rental demand:

“Queensland has become an investment hotspot thanks to interstate migration, relative affordability, and attractive rental yields."

Meanwhile, Western Australia and the Northern Territory are seeing the fastest growth:

• Investor loans surged 35% in WA and 40% in NT.
• Although NT still accounts for just 1% of all investor loans, its rapid growth signals rising demand.

First-Home Buyers: a market waiting to rebound

First-home buyer (FHB) loans increased 6% in 2024, but growth slowed at the end of the year, with Q4 seeing 1.3% fewer loans settled than in Q4 2023.

Soltani said:

“We’ve had our first rate cut in nearly five years, and more are expected in 2025, which will boost borrowing power.

On top of that, government incentives are at an all-time high, and potential changes to serviceability rules around student loans could provide even more relief for first-home buyers."

A few key factors could boost FHB demand:

• Interest rate cuts – The RBA has already reduced rates, and more are expected in 2025.
• Government incentives – First-home buyer assistance is stronger than ever, making entry into the market easier.
• The Bank of Mum and Dad – With home equity rising, parents are in a better position to help their children buy.

According to the report, the only states where FHB activity grew in Q4 were Queensland (+6%) and the Northern Territory (+2%).

Other states saw small declines.

Refinancing is back—and it's just the beginning

The report also highlights an interesting shift: refinancing, which had been slowing, picked up again in late 2024.

Data shows that in Q4 2024, 161,276 loans were refinanced, a 9% increase from the previous year.

In fact, internal refinancing surged 15%, showing that many borrowers are renegotiating with their existing lenders rather than switching banks.

Meanwhile, external refinancing, while still down 21% year-on-year, is showing signs of recovery after a tough 2023.

The bottom line

Right now, investors are leading the market, and 2025 is likely to see them pull even further ahead.

Victoria remains a sweet spot for homebuyers, but Queensland has solidified itself as the go-to state for property investors.

First-home buyers could see their fortunes shift this year, and refinancing is set to return in full force.

So the real question is, how are you positioning yourself in 2025?

As I always say, whether you’re an investor, homebuyer, or looking to refinance, understanding these trends will give you an edge in the market.

About Joseph Ballota Joseph is a Property Coach who put hundreds of people on the road towards wiping away their mortgage in under 5 years through expert Property Investment Plans.