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Investor capital has been shifting to Victoria’s detached housing corridors, with agencies urged to adjust their recruitment, marketing, and pricing strategies to get ahead of the market.
New data showed capital has been rotating nationally, with Melbourne seeing a significant rise in investor acquisitions, while withdrawals surge in Western Australia’s and Queensland’s booming markets.
The latest FOUNDIT Investor Index compared data from December 2025 to February 2026 with the same period last year, tracking properties that had sold in the previous 12 months before being listed as rentals.
FOUNDIT’s head of research, Kent Lardner, said yield compression in Perth and parts of Queensland appeared to have reduced investor incentive, while Victoria’s price softness had restored value perception.
He said that by following the data, real estate offices and agents could understand the next booming suburbs and tailor their business strategies.
“This isn’t a broad investor retreat; it’s capital rotation. Victoria’s detached housing corridors are seeing renewed investor entry, while parts of Queensland and Western Australia are consolidating,” he told REB.
“Agents who understand that distinction can adjust their vendor conversations accordingly.”
He added that, given that the index showed re-entry into the rental pool rather than sentiment, real estate offices could use the data to get ahead of broader market shifts.
“Agencies that monitor capital movement at SA3 level can align recruitment, marketing and pricing strategy before the shift becomes obvious in volume data,” he said.
Similarly, for property managers, Lardner said the data served as an early pipeline indicator, with investor entry activity typically translating into additional management stock in the following quarter.
“Where investor acquisition is cooling, the focus shifts to rent optimisation and portfolio retention rather than pure door growth. It’s about adapting strategy to capital flow,” he said.
According to the data, Victoria’s strongest investor-acquisition gains occurred in house-dominated markets with larger land components and relatively affordable entry prices.
Latrobe Valley saw the highest gains at 71.7 per cent, followed by Wallan at 47.9 per cent, Casey-South at 42.6 per cent, and Wyndham at 32.0 per cent.
“The uplift is not centred on high-density inner-city apartments. It is concentrated in family housing corridors where yields remain comparatively resilient and replacement cost underpins pricing,” Lardner said.
“This indicates investors are rotating back into suburban detached stock rather than speculative CBD unit product.”
Data showed that transactions in the Mid West dropped by 75.5 per cent, Armadale by 56.6 per cent, and Wanneroo by 50.7 per cent.
Lardner said all suburbs with the largest declines were house-oriented outer metropolitan and regional markets, showing incremental capital into the housing markets had slowed significantly.
However, he said investors in Western Australia were also retreating from apartment stock, with Perth City recording a 33.3 per cent decrease in transactions.
“The data suggests Western Australia has transitioned from rapid expansion to consolidation, particularly in land-backed outer suburbs that led the cycle,” Lardner said.
Similarly, Queensland recorded substantial declines in investor transactions, with Townsville seeing a decrease of 55.9 per cent, Gladstone transactions falling by 49.0 per cent and Brisbane Inner recording a decline of 51.4 per cent.
According to the data, the decrease varied by property type and suburb.
While detached housing historically dominated investor transactions in regional resource centres like Townsville and Gladstone, the findings suggested investor appetite had been reduced by yield compression.
Meanwhile, in Brisbane Inner, the decline was found to be more apartment-focused, with investor acquisitions in the CBD and inner-ring unit stock cooling substantially.
Larnder said the dual pattern of falling house activity in regional areas and reduced unit turnover in Brisbane Inner showed a state-wide moderation.
“This dual pattern – falling house activity in regional SA3s and reduced unit turnover in Brisbane Inner – indicates a state-wide moderation rather than a single asset-class adjustment,” Lardner concluded.
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