One in Three Australians Plan to Buy Investment Property — How Non-Bank Lenders Help Investors Banks Turn Away

Investor Appetite Surges Despite Rate and Tax Headwinds

New consumer sentiment research, highlighted by The Adviser, reveals that more than a third of Australians are planning to purchase an investment property within the next three years — a remarkable figure given the current environment of elevated interest rates and active debate around potential capital gains tax (CGT) changes.

For many of these aspiring investors — particularly the self-employed and members of the Chinese-Australian community — the major banks may not be the most accessible or appropriate lending solution. Non-bank lenders like MPFG Capital fill this gap.

What's Driving Investment Property Demand

Despite cost-of-living pressures and the RBA's cash rate holding at 4.10%, investor intent remains strong. Key drivers include:

Record rental yields: CoreLogic data confirms that rental growth is reaccelerating in 2026, with costs to tenants reaching record highs. For investors, strong rental income improves loan serviceability calculations and underpins long-term yield assumptions.

Property as a wealth-building vehicle: Australian culture maintains a deep and persistent bias toward residential property as a long-term wealth strategy, regardless of short-term rate cycles or political headwinds.

Equity mobilisation: Many existing homeowners are leveraging significant built-up equity to fund investment property deposits, bypassing the need for large cash savings.

Supply constraints: Tight housing supply in capital cities continues to support property values, reinforcing confidence among investors in long-term capital growth potential.

The Bank Barrier for Property Investors

Despite strong investment intent, a substantial proportion of aspiring investors — particularly the self-employed — encounter significant barriers when applying through the major banks:

Strict serviceability assessment: Under APRA guidelines, banks must apply a minimum 3% buffer above the loan rate when testing repayment capacity. At current rates, this means self-employed investors may be tested at rates exceeding 9%.

Two-year income documentation requirement: Self-employed applicants typically need to demonstrate two full years of consistently documented income through tax returns. For business owners whose income fluctuates or who have recently restructured their business, this is a significant hurdle.

Multiple liabilities: Investors who already hold business loans, vehicle finance, or other credit commitments face compounded serviceability challenges at major banks.

The Finance Brokers Association of Australia (FBAA) has also raised concerns that planned CGT changes — if implemented — could further complicate investor decision-making.

How Non-Bank Investment Loans Work

MPFG Capital offers investment property loans assessed under Alt Doc criteria, providing a genuine pathway for self-employed investors. Income can be verified through:

• BAS statements (12-month average, typically last 4 statements)
• Accountant's letter declaring gross income
• Business bank statements demonstrating consistent cash flow
• Existing rental income from other investment properties

MPFG Capital Investment Loan Features

A Note on Tax Considerations

The FBAA has warned that proposed CGT changes could dampen rental supply and deepen affordability challenges for tenants. Investors considering property purchases should obtain independent tax advice specific to their circumstances before committing to any purchase decision.

MPFG Capital does not provide tax or investment advice. All lending is subject to individual credit assessment and approval.

Frequently Asked Questions

Can I use rental income from my existing property to help qualify for an investment loan?

Yes, in most cases existing rental income can be included in the income assessment. MPFG Capital's credit team will consider your full income picture, including rental yields from properties you already hold.

What's the minimum deposit for an investment property through MPFG?

For Alt Doc investment loans, MPFG Capital typically requires a minimum 20% deposit (80% LVR), meaning genuine savings or equity from an existing property.

Do I need a full two years of tax returns for an investment loan?

No. MPFG Capital's Alt Doc framework does not require two years of tax returns. We assess income through BAS statements, business bank statements, and accountant letters — making it accessible for investors who are self-employed or have recently changed their business structure.

This article is general information only and does not constitute financial, tax, or investment advice.