KOALA INVEST - Newsletter

1. 23 August 2025 Investor Demand Soars Investors are continuing to enter the market, with new Australian Bureau of Statistics figures showing the number of investor loans written surged during the June quarter. The number of loans to investors is up by 3.5%, accounting for 49,065 loans. At the same time, the number of owner-occupier loans increased by 0.9%, accounting for 80,929 loans. The data shows that first home buyers are also active, taking out 28,861 loans during the quarter. ABS head of finance statistics, Dr Mish Tan, says the figures show that lending activity is still at relatively high levels. Tan says while the number of owner-occupier loans during the quarter is slightly lower than at the same time last year, the value of loans rose by 7.4%. The total value of loans throughout the June quarter reached $87.7 billion, which is 2% higher than the previous quarter and 7.2% higher than at the same time last year. New Home Sales Near Three-Year High Rising prices in the existing house market are leading to more Australians building new homes, with sales at higher levels than at this time last year. This is despite a 6.4% drop in new home sales between June and July, according to Housing Industry Association data. HIA Senior Economist, Maurice Tapang, says despite the monthly decline, new home sales in the three months to July 2025 increased by 15.9% - the highest level since the September quarter of 2022. “The fall in sales in July was driven by declines in New South Wales, Victoria and Queensland, while gains were recorded in South Australia and Western Australia,” he says. Tapang says demand for new homes is increasing on the back of ongoing population growth and low unemployment. All states recorded increased new home sales in the three months to July 2025 compared to the previous quarter, led by Victoria, which is up 23.4%, South Australia, 23.1%, New South Wales, 18.8%, Queensland, 13.3% and Western Australia, 2.6%. Quote Of The Week “The proportion of respondents saying they plan to buy a property in the next 12 months has risen sharply, with houses becoming increasingly popular compared to units and other property types.” APIM Editor, Craig Francis

2. Rental Growth Picks Up Pace Rental growth has accelerated across Australia’s capital cities for the first time in more than two years. Profit-Making Sales Up Sellers are continuing to benefit from strong demand, with new data showing a huge increase in the number of owners selling for a profit. Domain’s Profit and Loss report shows 97% of house and 88% of unit resales achieved a nominal profit in the first half of 2025. The pace of rental growth had slowed in recent years after soaring during the pandemic, but Cotality data shows rents are now up 3.7% in the 12 months to July. This follows 16 consecutive months of falling or a stable pace of rental growth. The level of profit-making sales is at its highest rate since 2022. The median gross profit for houses is $365,000 and $202,000 for units. For those who did sell at a loss, the median loss is $55,000 for houses and $46,000 for units. These strong outcomes reflect the long-term impact of rising property prices, especially since 2021,” the report says. In metropolitan markets, the data shows that rents are rising faster in the smaller cities, with Darwin up 7.6%, Hobart, 5.6%, Perth, 5.1%, Brisbane, 4.6% and Adelaide, 4.4%. Sydney rents are up by 2.4%, and Melbourne is up 1.1% in the past 12 months. Across regional Australia, rents are up 5.6%, with the highest increase in Regional Western Australia, which is up a massive 10.2%. “They’ve also been supported by increasing tenure, with the typical hold period now stretching to nine years for houses and eight years for units. This longer hold time gives owners more opportunity to build equity and realise capital gains.” Brisbane has the highest level of profit-making house sales of 99.5%, followed by Perth, 99%, and Sydney, 97.9%. In the unit market, Brisbane also comes out on top with 99% of sales for a profit, followed by Perth, 97.8% and Adelaide, 97.3%. Cotality economist, Kaytlin Ezzy, says with both rents and construction costs trending higher, there could be a housing inflation rise in the coming months, which could lessen the chance of future rate cuts. Sentiment High Optimism about property values has hit its highest level in more than five years. Australian Property Investor Magazine’s Q2 2025 Property Sentiment Report shows there is strong sentiment that property prices will continue to rise. It says only one previous quarterly survey has ever had more respondents tipping property price rises over the coming year. Queensland is the state most regard as the best for property investment prospects, followed by New South Wales, Victoria and Western Australia. Investors are predicted to be the busiest cohort of buyers in the next 12 months. “The cohort of our respondents who are looking to procure a property in the next 12 months as an investor climbed sharply this quarter, from 57% to 69%,” according to APIM Editor Craig Francis. He says property market confidence is “sky high” as prices continue to rise across Australia. “The proportion of respondents saying they plan to buy a property in the next 12 months has risen sharply, with houses becoming increasingly popular compared to units and other property types,” he says.