Property investment slumps in 2023, says ASX

An image of three high-rise apartment buildings with little money trees growing from their roofs. They're set at different heights, indicating different rates of growth.

Despite residential property investment remaining the second most popular asset for Australians in 2023, there has been a downward trend in the number of people investing in housing, according to the latest Australian Securities Exchange (ASX) report .  

According to ASX data from 2020, the total share of Australian investors with a stake in a residential investment property was 39%. But in 2023, after numerous cash rate hikes from the Reserve Bank of Australia (RBA) to preemptively quash inflation, that number has slipped down to 35%. 

Property investment then and now

In 2020, the cash rate hovered around lows of between 0.10% to 0.75% p.a. This meant investment property loan rates were much lower and more attractive than in 2023.

The current cash rate is certainly much higher at 4.10% p.a.

The ASX’s survey of investor goals showed that the portion of Australians who aim to purchase an investment property in the next three years is at a similar level for both current investors and ‘intending’ investors, at 16% and 15% respectively.

But with home loan interest rates being what they are right now, are prospective property investors being a little too optimistic about their goal? Not necessarily.

Compare investment home loan rates to find a lower rate 

While the average variable investment property loan in Mozo’s database for September 2020 was 3.78% p.a. (P&I @ $400,000 – 80% LVR), the story in 2023 is a little different. 

In September 2023 the average variable rate in our database sits at 6.96% p.a.† – at almost 7% p.a. it’s a far cry from the sub-4% figures up for grabs during the pandemic. 

But it’s not all bad news for property investors. 

In the Mozo database currently there are three lenders offering a variable rate investment property loan below 6% p.a., and over 70 investment loan products with rates below the average of 6.96% p.a.

Some of the lowest variable rates in our database come from lenders like Bank Australia, Hume Bank, and Pacific Mortgage Group, whose variable rates sit around 5.89% p.a.‡ (comparison rates may vary*). At 5.89% p.a., a $500,000 investment property over 30 years would result in estimated monthly repayments of around $2,962. 

In contrast, a loan for the same amount, paying an average variable investment loan rate of 6.96% p.a., would result in repayments of $3,313 per month – $351 more out of pocket and nothing to turn your nose up at. 

There are still plenty of rates in the Mozo database on offer that are lower than the average, which is precisely why doing an investment home loan comparison before you settle on just any old lender can pay off. 

Mozo compares over 90 providers to help kickstart your investment journey to finding the best home loan for you. Take a look at some of the featured products below to get started. 

Mozo may receive payment if you click products on our site. We don’t compare the entire market, but you can compare more home loans here.
Last updated 11 December 2024 Important disclosures and comparison rate warning*
What are your home loan needs?

Your loan-to-value ratio (LVR): 50%

Loan amount and LVR will affect interest rates.

  • Promoted

    Unloan Variable

    • Investment
    • LVR <80%
    Interest rate
    6.29 % p.a.
    Variable
    Comparison rate
    6.20 % p.a.
    Initial monthly repayment
    $3,092
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Promoted

    Variable Investor Home Loan 80

    • Investor
    • Principal and Interest
    • LVR<80%
    Interest rate
    6.34 % p.a.
    Variable
    Comparison rate
    6.36 % p.a.
    Initial monthly repayment
    $3,108
    Go to site

    Affordable home loan rate for buyers or refinancers.. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 30% deposit required.

  • Promoted

    Neat Home Loan

    • Investor
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.24 % p.a.
    Variable
    Comparison rate
    6.26 % p.a.
    Initial monthly repayment
    $3,075
    Go to site

  • Fixed Home Loan

    • LVR<90%
    • Investment
    • Principal & Interest
    Interest rate
    5.84 % p.a.
    Fixed 3 years
    Comparison rate
    6.73 % p.a.
    Initial monthly repayment
    $2,947
    Go to site

    Enjoy the investor benefits of a fixed loan term for 3 years with IMB. Get up to $4,000 cashback (T&Cs apply). Up to 12 months repayments in advance without penalties. Free Internet and Mobile Banking redraws (T&Cs apply). Up to a 30 year loan term. Split loan available. No offset account.

  • Flex Home Loan

    • Fixed
    • Investor
    • Principal & Interest
    • LVR <60%
    Interest rate
    5.99 % p.a.
    Fixed 2 years
    Comparison rate
    6.43 % p.a.
    Initial monthly repayment
    $2,995
    Go to site

  • Neat Home Loan

    • Investor
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.24 % p.a.
    Variable
    Comparison rate
    6.26 % p.a.
    Initial monthly repayment
    $3,075
    Go to site

  • Flex Home Loan

    • Investor
    • Principal & Interest
    • LVR <60%
    Interest rate
    6.24 % p.a.
    Variable
    Comparison rate
    6.48 % p.a.
    Initial monthly repayment
    $3,075
    Go to site

  • Unloan Variable

    • Investment
    • LVR <80%
    Interest rate
    6.29 % p.a.
    Variable
    Comparison rate
    6.20 % p.a.
    Initial monthly repayment
    $3,092
    Go to site

    Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.

  • Variable Investor Home Loan 80

    • Investor
    • Principal and Interest
    • LVR<80%
    Interest rate
    6.34 % p.a.
    Variable
    Comparison rate
    6.36 % p.a.
    Initial monthly repayment
    $3,108
    Go to site

    Affordable home loan rate for buyers or refinancers.. No monthly or ongoing fees. Option to add an offset for 0.10%. Access to savings with unlimited redraws available. Minimum 30% deposit required.

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† Based on a variable rate investor home loan on the Mozo database, on a loan of $400,000, paying principal & interest, LVR <80%, as at 5 September 2023. 

‡ Based on a variable rate investor home loan on the Mozo database, paying principal & interest on a $500,000 investor home loan, LVR <80% over a 30 year loan term, as at 5 September 2023. 


* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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