Is Australian Investor Activity About to Fall? What the CoreLogic Data Signals for Borrowers

New research from CoreLogic is raising a pointed question for Australia's property market: is investor activity about to fall? With CGT and negative gearing reforms now clearing the lower house, rising holding costs, and softening price growth in capital cities, the data suggests a meaningful slowdown may be ahead — but non-bank financing options remain a key pathway for investors who are well-positioned.

What CoreLogic's Data Shows

CoreLogic's May analysis indicates that while investors have remained active through 2025 and early 2026, several converging pressures are emerging:

• Capital city values flatlined in May 2026, with the national home value index showing near-zero growth
• Regional markets outperformed capitals, suggesting a shift in where investment returns are strongest
• Rental yields, while still positive, are being squeezed by property value appreciation outpacing rent increases in many markets

The question CoreLogic is asking — whether investor activity is set to fall — is not rhetorical. The combination of policy, rate, and market headwinds creates a real risk of pullback.

Three Headwinds for Investors in 2026

1. Tax Reform Uncertainty

The passage of CGT and negative gearing changes through the lower house this week adds direct pressure on net returns for investment properties. Until the legislation is finalised, investors face planning uncertainty — a well-known deterrent to new commitments.

2. Borrowing Costs Remain Elevated

With the RBA cash rate at 4.35% (effective since May 2026) and the next board decision not until 16 June 2026, investors are operating in a high-rate environment that has persisted longer than many anticipated. Major bank economists largely expect rates to hold at the June meeting, meaning relief is not imminent.

3. Softening Price Growth

If capital city values flatline or decline, the capital growth component of investor returns — often the primary justification for holding property — weakens. Investors who purchased in 2021–2023 at peak prices may find their equity position under pressure.

Where Investors Are Still Finding Opportunity

Not all markets are equal. CoreLogic's data shows regional property markets continuing to outperform capitals, driven by internal migration and lifestyle factors. For investors with the flexibility to look beyond the major capitals, opportunities remain — particularly in Queensland and select regional Victoria and New South Wales markets.

Commercial property also presents a different risk profile. Industrial and logistics assets continue to show strong rental demand, while retail and office face ongoing structural headwinds. Investors diversifying away from residential are finding commercial lending — including through non-bank lenders — a viable alternative.

What This Means for Financing

For investors navigating this environment, financing flexibility matters more than ever:

• Self-employed investors who have difficulty meeting major bank income documentation requirements can access Alt Doc and non-bank lending pathways
• Portfolio investors with multiple properties may find non-bank lenders more willing to assess applications holistically rather than mechanically applying each bank's serviceability floor
• Commercial property buyers can access competitive LVRs through specialist non-bank lenders without the rigid residential-investment overlays that major banks increasingly apply

Whether investor activity ultimately falls depends on how the Senate handles the tax reform legislation and what the RBA signals in June. What is clear is that investors who act with well-structured financing before any further policy tightening will be in a stronger position.

This article is general information only and does not constitute financial or investment advice. Please seek professional advice appropriate to your circumstances.