Record low interest rates, sustained property price growth and lucrative rental yields means right now is an opportune time to take the plunge as a property investor.

Despite significant price growth in every Australian capital city in recent months, the current real estate market conditions have combined to create a “perfect storm” for investors.

An easing of government incentives encouraging first homebuyers onto the property ladder means investors are jumping headfirst back into the market after a brief hiatus spurred by concern, caution and uncertainty with the onset of the COVID pandemic in early 2020.

Return of investors

Latest data from the Australian Bureau of Statistics shows that investors have returned to the property market en masse, with the value of new loans to investors almost doubling since the same time last year.

The ABS Lending Indicators August 2021 report, released on October 1, found new investor loan commitments continued to grow since October last year while owner-occupier commitments dipped, with the largest falls seen in states impacted by lockdown restrictions.

In stark contrast to owner-occupier loans, the value of investor loans was 92% higher compared to the previous year; and the highest seen since April 2015. This compares with an increase of 33.5% in the value of owner-occupier loans.

In Queensland, the value of new home loans to investors has trebled since May 2020 and have doubled in WA since March 2020. Victoria’s new investor home loans surged by almost 70% between October last year and May this year but have dipped slightly since.

The ABS saw increases in investor loan commitments were seen across most states, most notably Queensland (up 13.6%), Western Australia (up 7.2%) and Victoria (up 1.9%).

Sizzling property market

The promising revival amongst investors comes as CoreLogic’s Hedonic Home Value Index shows that the property market is remains hot in every capital city of Australia with extreme property price growth. And rent yields are following suit.

Nationally, Australian housing values are growing at their fastest annual pace since 1989. In the past 12 months, dwelling prices have increased by more than 20% across the country.

Putting the spotlight on individual cities, Hobart sustained the greatest annual hike in values with a 26.8% increase in the year to September 30, while Melbourne experienced the lowest growth, netting a rise of 15%. In Brisbane, dwelling values jumped 19.9% in the year, while Perth properties saw an increase of 18.1%.

Across the rental markets there has been a softening of rental yields from 3.5% in the March quarter to 1.9% in the September quarter, but rent returns still remain strong.

The end of HomeBuilder and other state government initiatives may see a decrease of first-home buyers entering the market, which could be good news for those looking to venture into the housing investment space.

Costs and considerations of investing

For prospective investors, it’s important to consider the costs of buying an investment property, including stamp duty, conveyancing, legal fees and building inspections; as well as the fact that you may have to stump up some extra cash to cover the mortgage repayments if the rent raised doesn’t entirely cover your repayments.

The age-old property catchcry: “location, location, location” rings as true for property investments as it does your own home, so it’s best to pay keen attention to where you buy.

It’s a good idea to buy in suburbs or towns you’re familiar with, or take some time to research other locations, including potential cohorts of tenants. For example, if the property is close to a university, it may attract students. Or if the suburb is known for its good schools, you might find yourself with a long-term lease with a family who are likely to stay local to see out their children’s schooling days.

CoreLogic cites that one of the major benefits to jumping into the property market now as an investor is that investor mortgage rates remain low, with the average three-year fixed rate for a new investor loan sitting at 2.38% while variable rates were averaging 3.01%.

Its latest quarterly rental review also shows the strongest quarterly rental growth was recorded in Brisbane (2.6%) and Sydney (2.3%). Perth recorded a surge in rental growth earlier this year but that mellowed to 0.3% in the September quarter.

And experts are predicting the hot market is unlikely to come off the boil any time soon.

Shane Geha, managing director EG Advisory and Professor of Practice (Engineering) at the University of NSW, says Australians have found extra pocket money during the pandemic with the inability to travel and people will continue to throw their hard-earned cash into property.

Satterley is Australia’s largest private residential developer and has built over 170 communities across Western Australia, Queensland, and Victoria. For more information about all Satterley communities, visit

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2021-11-11 Property Tips

Should you make the jump into the investment property market?


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