Investors driving spring property resurgence
A "supercharged" spring selling season looms large, as investors return to the market, borrowing power is boosted and capital city price growth overtakes the regions.
Driven by a surge in investors returning to the market, recent cash rate cuts, boosted buyer confidence and spending power, property prices look set for a boost over a busy spring selling season.
This property market resurgence comes as Australian capital cities reclaim the price growth lead from the regions for the first time in nine months.
Over the three months to July, the Cotality capital city Home Value Index rose 1.8 per cent, while regional dwelling values increased by 1.7 per cent. Since bottoming out at -0.7 per cent in January, the capital’s quarterly trend has continued to gain momentum.
New data from Money.com.au has shown that investor lending is behind much the renewed heat in real estate markets around the country, while a lack of affordability is deterring others.
Investor lending rose 12 per cent in the year to June 2025, down from 19 per cent, but is still expanding at three times the pace of owner-occupier lending, which grew 4 per cent after easing from 6 per cent the previous year. First home buyer activity, meanwhile, flatlined with no annual growth.
Money.com.au’s Property Expert, Debbie Hays, on Tuesday (26 August) said investors are capitalising on falling rates and rising rental yields.
“The expectation is that growing investor activity will inject much-needed capital into the housing sector, boost rental supply, and support broader economic growth, particularly once the RBA moves back into a hold position with the cash rate, potentially sometime next year,” she said.
There were 324,972 owner occupier loans issued in the year to June 2025, up 4 per cent annually. Queensland recorded the strongest annual loan growth of all major states at 7 per cent, while Western Australia saw no annual growth for the first time since June 2024.
Loans for new dwellings recorded the steepest fall, falling by 1 per cent to a decline of 8 per cent in the year to June 2025. Construction loans also weakened sharply, with growth plunging from 9 per cent to just 3 per cent over the same period, while land loans slipped further into negative territory, falling from –2 per cent to –5 per cent.
Domain data has revealed that houses sell for a 2.6 per cent premium in spring compared to winter.
That higher performance looks set to play out in 2025 too. July clearance rates for 2025 have reached their strongest point in a decade, primarily driven by Sydney and Melbourne.
Those cities’ clearance rates for winter 2025 have already surpassed spring 2024, demonstrating the renewed momentum in the market.
Ms Hays said the recovery in owner occupier loans shows confidence is returning, but a return to peak levels would take time, with supply still constrained and borrowing costs remaining elevated.
“Further interest rate cuts will bring more homebuyers back into the market, but without addressing supply, renewed demand risks pushing prices higher and locking some buyers out altogether,” she said.
Regional markets record diverse results
Cotality Australia Economist Kaytlin Ezzy, said that although the capital cities had overtaken the regions, this was more due to strength in the cities rather than weakness in the regions.
Lismore was the standout performer across the top 50 regional markets, rising 4.5 per cent rise over the quarter to a new peak in July, making a full recovery from the nearly -18 per cent decline recorded amid the 2022 flood recovery and concurrent interest rate hikes.
Ms Ezzy noted the rest of the top five was a mixed bag, with just one resource market, Bunbury in Western Australia, made the list — a significant departure from the trend seen over the past few years.
“Western Australia and Queensland’s mining markets have dominated value growth rankings over much of the past two years. However, momentum has eased as the relative affordability advantage that these regions once offered dissipates.”
While no longer the top performers for quarterly growth, Albany (23.1 per cent) and Geraldton (20.8 per cent) in WA, and Mackay (18.2 per cent) and Townsville (16.7 per cent) in QLD, still saw the strongest annual increases.
Albany also recorded the shortest selling times (12 days) and some of the lowest vendor discounting rates (-1.7 per cent).
At the other end of the scale, just three regions saw values decline over the year, with the Bowral – Mittagong region in the central highlands recording the sharpest decline (-2.1 per cent).
