The Latest Housing Market Trends: Opportunities and Challenges for Buyers and Investors
As the Australian housing market continues to evolve, understanding the latest trends is crucial for making informed decisions, whether you're a first-home buyer, a seasoned investor, or looking to refinance. Recent data from Loan Market Group (LMG) provides valuable insights into regional dynamics, lending growth, and market opportunities. Let’s delve into what this means for you.
1. Coastal Sydney and Greater Western Sydney: A Tale of Two Markets
While Sydney remains one of Australia’s most populous cities, its housing market presents mixed opportunities:
Investor Dominance: Investor lending in Coastal Sydney has surged by 74% since 3Q22, reflecting a strong appetite for property investments in this high-demand region. Greater Western Sydney follows closely with a 56% increase in investor approvals.
Owner-Occupied Constraints: Despite the population size, owner-occupied lending in Sydney represents just 16% of national applications by value. Affordability and borrowing capacity constraints remain significant barriers for many potential homeowners.
2. Queensland: A Booming Market Across the Board
Queensland stands out as a top performer in the current housing landscape:
Southeast Queensland Leads the Way: Brisbane, the Gold Coast, and the Sunshine Coast have seen remarkable growth. Investor approvals rose by 54% in Greater Brisbane and 69% on the Gold Coast. Owner-occupied lending also saw substantial increases, with the Sunshine Coast up by 62%.
Far North Queensland Shines: Investors in Far North Queensland experienced an 88% growth in approvals, while owner-occupied lending climbed by 68%, highlighting the region's balanced growth.
3. South Australia and Western Australia: Steady Growth and New Opportunities
South Australia: Adelaide’s investor lending has grown by 59% since 3Q22, with owner-occupied lending up by 38%. The rest of South Australia also saw strong growth, with owner-occupied approvals up 69% and investors up 41%.
Western Australia: Perth has seen a remarkable 119% increase in investor lending since 3Q22, signaling a robust return of investors to the market. Owner-occupied lending also increased but at a more moderate pace of 22%.
4. Victoria: A Market Facing Headwinds
Unlike the rapid growth seen in other states, Victoria’s market remains relatively subdued:
Declining Market Share: Melbourne’s share of national mortgage approvals has dropped from 22% in mid-2022 to just 17% in March 2025.
Regional Trends: While Rural Victoria saw a modest uptick in owner-occupied approvals (up 21%), Melbourne’s inner, east, and west regions experienced declines, with owner-occupied lending down by 4-14% and investor activity showing mixed results.
5. National Trends and the Impact of Interest Rates
On a national scale, the housing market is seeing steady but uneven growth:
Flat March Quarter: While mortgage approvals plateaued in 1Q25, they remain 15% higher year-on-year.
Rate Cut Impacts: The Reserve Bank of Australia’s recent rate cuts have yet to significantly stimulate loan demand, although this may change as borrowing capacity improves.
Investor Momentum: Across Australia, investor activity has been a major driver of growth, particularly in Queensland, South Australia, and Western Australia.
What Does This Mean for You?
For First-Home Buyers: If affordability is a concern, exploring markets outside Sydney and Melbourne could open up more opportunities. Regions like Far North Queensland and South Australia offer promising prospects.
For Investors: Now is an excellent time to leverage strong regional growth in Queensland, South Australia, and Western Australia. With high investor activity and median loan amounts rising, strategic investments in these areas could yield significant returns.
For Homeowners: If you're considering refinancing, the stabilizing interest rates and rising property values in certain regions make this a great time to reassess your options.
Final Thoughts
The Australian housing market is full of opportunities, but success depends on understanding the nuances of each region and aligning your strategy with the latest trends. Whether you’re buying your first home, expanding your investment portfolio, or looking for better loan terms, navigating this dynamic market requires expert guidance.
As a mortgage broker with over a decade of experience, I’m here to help you explore your options and make the most of today’s market conditions. Contact me today to discuss your goals and discover tailored solutions to meet your needs.