Investment lending now carries higher risk profile than owner-occupied

The Australian Prudential Regulation Authority (APRA) has released its latest Quarterly ADI Property Exposures Statistics report for 2025 Q2 (June). A significant shift in lending risk has emerged in the past year. The share of loans with loan-to-value (LVR) above 80% is now greater for investment lending compared to owner-occupied. Investment loans carrying a higher risk profile than owner-occupied lending marks a complete reversal from pandemic-era patterns where high risk owner-occupied lending far outpaced investment.

Key stats you need to know

• Investment loans with LVR ≥ 80% held steady between 28 to 32% since APRA began reporting in Q1 2019.
  
  
• The percentage of owner-occupied loans with LVR ≥ 80% rallied from 39% pre-pandemic, reaching 46% in Q4 2020, and cooling to 30% this year.
  
  
• The largest decline (to 28%) in high risk owner-occupied loans occurred in Q3 2023.

Risk has shifted from owner-occupiers to investors

The APRA Property Exposures Statistics reveals a striking reversal in lending risk patterns over the recent years. In late 2020, owner-occupied loans dominated high-LVR lending at 46%, significantly outpacing investment loans, then at 34%.

As interest rates soared from mid-2022, we observed a decline in high risk loans both owner-occupiers and investors, reaching their lowest ratios in mid-2023. From then on, a slight uptick for both loan types is observed moving into 2024 where they stabilised in the high interest rate environment. Moving to 2025 however, owner-occupiers appear to have adopted a more conservative approach, with high-LVR lending declining sharply and stabilizing around 30-31%. Meanwhile, investors have maintained a consistent appetite for leverage, with roughly one in three (32%) investment loans carrying LVRs above 80%.

Source: APRA Quarterly Property Exposures Statistics highlights

About the research

Statistics in this article were drawn by Agile Market Intelligence from APRA’s quarterly ADI Property Exposure Statistics (June 2025). The dataset covers property loans across authorised deposit-taking institutions, including loan-to-value statistics for owner-occupied and investment housing loans.

Agile Market Intelligence also conducts Broker Pulse, a monthly survey of residential and commercial mortgage lenders. It is a community-driven knowledge base of lender performance that offers transparency to the market by surfacing these collective insights from the broker community. This empowers brokers to make informed decisions and enables lenders to benchmark and improve performance.

Participating brokers receive access to a bird’s-eye view of the lender benchmarking data each month. To sign up or for more information visit https://www.brokerpulse.com.au/.‍