Western Australia leads investor surge as property market booms
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Western Australia has experienced a dramatic 37 per cent annual increase in investor loans, more than triple the national average, according to new data analysed by Money.com.au.
The surge in WA investor activity has been driven by interstate buyers targeting Perth’s property market, where house prices have risen 23.8 per cent year-on-year.
Peter Drennan, Research & Data Expert at Money.com.au, said investor loans now account for 38 per cent of new loans issued across Australia, up from 22 per cent in 2020.
“WA is the golden goose, with the number of investor loans in the state rising by 37 per cent annually,” Mr Drennan said.
“This investor interest is fueled by five key factors: the state’s growing population, increasing property values, strong rental demand, low vacancy rates, and the resources boom in the region.”
However, Money.com.au’s Home Loans Expert Mansour Soltani warned the WA housing market may have peaked, with investors now turning to Victoria and South Australia.
“WA has seen solid growth in investor lending in the last five years, but property prices in the state are now higher than investors may be willing to pay for,” Mr Soltani said.
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“It’s an inflated market and the bubble will eventually burst.”
The data shows investor loan numbers have increased 13 per cent annually in New South Wales and Queensland, and 7 per cent in South Australia.
In contrast, the ACT and Tasmania saw decreases of 5 per cent and 3 per cent respectively.
The average investor loan in WA is now $454,000, up 9 per cent annually.
This compares to an average of $749,000 in New South Wales (up 6 per cent) and $520,000 in Queensland (up 9 per cent).
Nationally, the annual value of investor loans peaked at $127 billion in June 2022 but has since fallen 7 per cent to $118 billion.
However, WA bucked this trend with loan values increasing 54 per cent from $7.8 billion in June 2022 to $11.8 billion currently.
The analysis also revealed a 23 per cent annual rise in construction loans for investors, while first-home buyers using investor loans have seen 20 per cent annual growth.