Investments jump as vim returns to property market

Recent rate cuts spark renewed confidence as investor lending surges – but broker advice is key amid shifting market conditions

AFTER A long stretch of uncertainty, property investors are stepping forward again, encouraged by the Reserve Bank of Australia’s recent rate cuts and a fresh sense of possibility. For many, the mood has shifted from caution to curiosity about what the next chapter might hold. The market response to the cuts has been swift and decisive, with investor lending climbing to nearly $33 billion in the June quarter, according to government data – a 6.9% increase over the past year that signals renewed appetite for property investment despite ongoing economic uncertainties. Other surveys indicate an even higher level of investor growth, with one showing the value of loans to investors rising 26% year-on-year in the quarter.

opportunity for property investors to enjoy capital gains on any existing properties they may have, as well as growth in their equity – equity that can be used to potentially fund the purchase of additional properties.” Melbourne’s median dwelling price is now higher than it was 12 months ago, with its annual growth turning positive in July after nearly a year of being negative. Brisbane, Perth and Adelaide are leading the way over Sydney and Melbourne, and with a number of rate cuts still expected in the easing cycle, it’s hard not to be optimistic about the outlook for the coming 18 months.

However, MacRae is quick to point out that technology, while important, hasn’t replaced the human element that remains central to successful investment outcomes. “Whilst technology and product innovation continues to attract the headlines, at the heart of what we and brokers do is relationship, service and advice. This continues to be the key to driving successful outcomes.”

Investor internal refinancing ($bn)

Value of new investor loan commitments for dwellings*

The equity multiplication effect creates a compelling investment cycle. As existing properties appreciate in value, investors can leverage this increased equity to expand their portfolios, potentially accelerating their wealth-building strategies in ways that weren’t feasible during the higher interest rate environment.

Homeownership is a fundamental part of the Australian dream. However, the path can be challenging, especially when traditional lending can be strict and unforgiving. We’re here to change that. Since 2000, Bluestone Home Loans has been helping borrowers with complex or unique financial situations access the market with confidence – offering them a chance to purchase property, when others won’t, by providing tailored lending solutions. We empower brokers to serve a broader range of clients, from self-employed professionals to borrowers with past credit issues or those seeking niche lending options. With a 25-year legacy, Bluestone Home Loans has become a trusted leader in the Australian lending market, known for delivering innovative, flexible and straightforward solutions that break the mould of traditional lending.

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At CommBank, we’re focused on giving our brokers more confidence in CommBank and delivering an exceptional experience for them and their customers. We are doing this by being reliable, transparent, accessible and adaptable. Our strategy has been designed based on broker feedback and focuses on how we can improve the experience and build a strong and more sustainable third party banking channel. If you’re not already accredited with CommBank, now is a great time to join us, as we’ve simplified our accreditation process. Head to www.commbank.com.au/home-loans/broker-accreditation.html to find out more. If you’re already accredited with CommBank, check out our 24/7 training hub – it’s all part of our commitment to giving you more confidence to build your business, and delivering an exceptional homebuying experience to customers.

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Digital transformation has streamlined many aspects of property investment financing, making the process more efficient for both investors and their advisers. These technological advances have reduced friction in what was traditionally a paper-heavy, time-consuming process. “One of the most impactful changes we have seen to the lending process over the past year has come from the improvement in technology and product flexibility,” says MacRae. “Digital loan platforms and streamlined document collection have made applications and the approval process faster and more efficient, allowing brokers to deliver a smoother experience for their clients.”

“Property investors in Australia are currently moving through a complex financing environment shaped by high demand and limited property supply”

Baber Zaka, CommBank

Businessman analyzing real estate investment data with futuristic city skyline and candlestick chart

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The RBA’s decision to cut rates three times so far in 2025 has provided the catalyst many investors were waiting for. “Cuts have lifted investor sentiment, encouraging many investors to re-enter the market,” says Tony MacRae, chief commercial officer at Bluestone Home Loans. This renewed confidence stems from more than just lower borrowing costs. MacRae explains that the rate cuts have “signalled a more stable outlook, encouraging investors to re-enter the market with a long-term view on capital growth”. The market response has been measurable and immediate. Since the summer, Cotality Australia has reported a solid half-year of dwelling price increases across the country. This price appreciation represents exactly the kind of capital growth opportunity that attracts property investors, particularly those who already hold assets in their portfolios. “Historically, when we have seen interest rates come down, it brings more property buyers into the market, potentially resulting in higher home prices,” says Baber Zaka, general manager of third party banking at Commonwealth Bank. He points to the broader implications: “This represents a real

Looking ahead, industry experts are encouraging investors to maintain a strategic perspective while remaining adaptable to changing conditions. The current environment presents opportunities but also requires careful planning. “For brokers working with property investors, the key is helping clients stay informed and adaptable,” says MacRae. “Market conditions and lending policies continue to shift, so proactive guidance is essential.” The importance of proper financial structuring cannot be overstated in the current market. MacRae emphasises that “it’s also important to help investors structure their finances in a way that supports long-term portfolio growth”. Zaka reinforces the value of professional guidance: “For those investors, the best thing they can do is speak to their broker. Brokers have great insights into the different products, policies and rates offered by different lenders, as well as a finger on the pulse when it comes to the changing property landscape.” The rental market dynamics also continue to support investor interest. “While rental growth has slowed across most states, rental yields continue to remain stable at 3.7%, even with a limited supply of rental properties in the market. However, as property value growth trends strengthen, rental yields may tighten in the future,” says Zaka. Yield stability, combined with the potential for capital growth in a lower interest rate environment, may help create an attractive investment proposition for those able to secure appropriate financing. But MacRae also notes that “fluctuating property values have led to more cautious borrowing strategies”. This suggests that the market is more mature and wary of some of the excesses of the past, and has taken various steps to hedge against any fluctuations. A Property Investment Professionals of Australia (PIPA) survey late last year showed that some investors were exiting the market in certain areas as costs outweighed the benefits – reasons cited included rising compliance costs, increasing land taxes and higher government charges.

“One of the most impactful changes we have seen to the lending process over the past year has come from the improvement in technology and product flexibility”

Tony MacRae, Bluestone Home Loans

Other numbers also tell a compelling story. Investors now represent 37.5% of all new lending in the official data, demonstrating their significant presence in the market even as conditions continue to shift. This level of activity reflects both opportunity and challenge in equal measure, as investors balance the promise of capital growth against the realities of tighter lending conditions and cost of living pressures. Yet renewed optimism brings its own set of hurdles – it isn’t the same market that we saw in the last heady upswing. In this environment, the experience and guidance of a skilled mortgage broker can make all the difference, helping clients approach each decision with confidence and clarity.

Industry experts

Darren McLeod

Beyond Bank

Fernando Lemos

Bank Australia

Industry experts

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Bank Australia

Fernando Lemos

Beyond Bank

Darren McLeod

Beyond Bank

Fernando Lemos

Bank Australia

Industry experts

Bank Australia

Fernando Lemos

Beyond Bank

Darren McLeod

Market momentum builds on rate relief

Tony MacRae

Bluestone Home Loans

Baber Zaka

CommBank

Baber Zaka is general manager of third party banking at Commonwealth Bank, where he leads broker partnerships with a focus on transparency, collaboration and delivering value. With over a decade of experience at CommBank, he has held senior leadership roles across distribution strategy and operations. Zaka brings a strong background in financial analysis, strategic planning and deal management, honed through his experience at NBN Co, Virgin Money, RBC and KPMG. He holds a Bachelor of Science in Economics and Philosophy from the London School of Economics. Known for his broker-first mindset, Zaka champions innovation and trust within the lending ecosystem.

CommBank

Baber Zaka

Tony MacRae stepped into the role of chief commercial officer at Bluestone in August 2023, bringing with him a wealth of experience in financial services. He spent a decade with the Westpac Group, where he served as acting CEO of RAMS and led third party distribution at Westpac. Known throughout the industry for his ability to drive sales initiatives and strategic direction, MacRae excels at building partnerships and leading teams towards impressive business growth. At Bluestone, he is focused on empowering the company’s broker partners to better serve customers. In addition to his work at Bluestone, MacRae has dedicated the last 11 years to the Royal Flying Doctors Service South Eastern Section as a board member and treasurer. He holds a Bachelor of Economics from Macquarie University.

Bluestone Home Loans

Tony MacRae

Navigating new lending realities

Published 01 Sep 2025

Change vs previous qtr

Change vs same qtr 12 months prior

Sep–Dec 2024

Jan–Mar 2025

Apr–Jun 2025

25%

20%

15%

10%

-5%

32.4

32.9

32.4

Source: ABS Lending Indicators

*Seasonally adjusted

Source: Money.com.au, Mortgage Insights: State by State report, March 2025

Owner-occupier

Investor

70%

New South Wales

Annual growth in loans by type

Victoria

Queensland

South Australia

Western Australia

Tasmania

Northern Territory

Australian Capital Territory

Australia

60%

50%

40%

30%

20%

10%

While investor enthusiasm has returned, the path to securing finance remains more complex than in previous cycles. The lending environment has become increasingly sophisticated, requiring investors to demonstrate stronger financial credentials while dealing with reduced borrowing capacity. “Property investors in Australia are currently moving through a complex financing environment

shaped by high demand and limited property supply,” says Zaka. The challenge extends beyond simple serviceability calculations, encompassing broader economic pressures that affect household budgets and investment capacity. Cost of living pressures have become a significant factor in lending assessments. MacRae acknowledges that “serviceability remains a key challenge, especially as some lenders continue to tighten their assessment”. However, he notes that “the lending environment has also become more diverse, with non-bank lenders such as Bluestone offering flexible solutions that cater to a wider range of investor needs”. This diversification of lending options has opened doors for investors who might not fit traditional banking criteria. MacRae highlights specific innovations: “Our alt-doc home loans are ideal for self-employed investors who may not have traditional income documentation but still have strong financials. We also offer SMSF [self-managed super fund] residential investor loans, enabling borrowers to use their SMSF to purchase their next investment property – an option not always available through mainstream lenders.”

The evolution in lending approaches reflects the market’s recognition that today’s investors come from diverse backgrounds and employment situations. Traditional employment patterns have shifted significantly, with more Australians working under self-employed or contracting arrangements that require different documentation approaches. “For those able to invest, lender policies play a critical role,” says Zaka. “Institutions like CommBank have responded with new servicing options, such as a revised HELP [HECS] debt policy aimed at boosting borrowing capacity,” says Zaka.

The complexity of the current market has elevated the importance of professional guidance, particularly from mortgage brokers who understand both lending requirements and investment strategy. Simple loan facilitation is just the beginning. “Their role has expanded beyond securing loans and they now help investors plan, structure their portfolios and make informed decisions to align them with their long-term goals,” says MacRae. This strategic partnership approach reflects the reality that successful property investment requires ongoing management and adaptation to changing market conditions. Zaka emphasises the comprehensive nature of modern broker services: “Their role includes understanding each investor’s unique goals and offering tailored guidance that aligns with long-term investment strategies, while also staying up to date with policy changes and educating clients on how these may affect their borrowing capacity.” The broker’s value proposition extends throughout the investment life cycle. Zaka notes that “their support extends beyond securing the initial loan, as they continue to engage with clients over time, offering ongoing guidance and helping investors adapt to market shifts”. This long-term relationship model ensures investors remain positioned to capitalise on opportunities as they arise. The educational component has become particularly important as lending policies continue to evolve. MacRae explains that “education and scenario planning have become central to broker-client relationships, which is why Bluestone’s BDMs work closely with our brokers to ensure they have the tools and support needed to deliver great outcomes for their investor clients”.

The strategic role of professional advice

Technology transforms the investment process

Strategic positioning for future growth

“Investors are focusing more on yield and risk mitigation, often diversifying across regions and asset types,” says MacRae. The market’s regional diversification trend reflects investor sophistication and risk management awareness. As traditional markets become more expensive and competitive, investors are exploring opportunities in areas that may offer better yields or growth prospects – a change in strategy that requires both additional due diligence and local market knowledge. “Investors seeking stronger rental yields are increasingly looking to regional and interstate markets, though unfamiliarity with these areas can present additional challenges,” says Zaka. While the hurdles may be different this time around for investors, one thing that remains constant is the value of good advice from brokers with their ears to the ground. “Mortgage brokers have become increasingly vital in helping property investors navigate the current lending environment,” says Zaka. “As interest rates change and lending policies evolve, brokers are now relied upon not just for access to finance but for strategic guidance.”

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