Investors are tipped to return to the property market throughout 2021 as rising prices and yields in suburbia and the regions offer an attractive proposition. The latest loans data suggests investor activity is already rising.

The suburbs and regions are attracting investors as prices boom and vacancy rates push below 1% in many areas, putting upward pressure on rents.

“Investors have often been the last segment of the market to turn,” says AMP chief economist Shane Oliver. “Momentum in prices is attracting investors back, but more so in the smaller cities.”

Investors have been largely absent since 2019, dropping to an 18-year low in May 2020. Owner- occupiers and first-home buyers filled the gap, reducing investors market-share to below 30%.

But NAB says rising confidence from the resilience of prices through the pandemic is spurring investors back. “We’ve seen positive signs for investors in recent months, with lending demand picking up sharply towards the end of last year,” a spokesperson said.