The data shows Melbourne investors aren't leaving. They're rotating.
The media narrative says landlords are fleeing Victoria. Cotality's latest quarterly finance data tells a different story — and it gets more interesting at suburb level.
The media narrative says landlords are fleeing Victoria. The data says something different.
Cotality's latest quarterly finance data (new lending commitments, excluding refinancing) shows investor-to-owner-occupier loan ratios by state:
Investor : Owner-Occupier Loan Ratio — Q1 2026
For every owner-occupier buying in Victoria right now, 2.5 investors are buying alongside them. That's not an exodus. That's concentration.
What actually happened
Victoria's 2023–24 land tax changes hit over-leveraged investors hard. Many sold — not because the market was broken, but because their capital structure was. The forced sellers moved quickly, often off-market or at small discounts, to avoid extended campaigns.
The buyers who absorbed that stock were investors with equity and unconditional capacity. They moved in 2–3 weeks. FHBs, who typically need 6–8 weeks for unconditional finance, largely missed it.
The 2.5:1 ratio is what that cohort rotation looks like in the lending data.
Where the capital is actually going
Not all of VIC is equal. The investor flow is concentrated in specific outer corridors where the math works.
The outer Melbourne growth corridors — Wyndham Vale, Melton, Craigieburn, Frankston — are all sitting in the $580–$700K range. Equivalent distance from Sydney CBD starts at $900K+. Same rental income, lower capital deployed, better yield.
At suburb level, the signal shows up in vacancy rates and days on market. Melbourne's outer suburbs are clearing in under 21 days with vacancy under 1.8%. The inner ring is taking 35–42 days with vacancy above 3%.
That spread — tight outer, loose inner — is what intelligent capital is reading.
The price-to-rent signal
One metric the institutional buyers are using that most retail investors ignore: price-to-rent ratio (PTR). Simple — property price divided by annual rent income.
Price-to-Rent Ratio by Market
When PTR is below 20× and vacancy is below 2%, you have a structural rerate signal — the rental market is tight, the purchase price is low relative to income, and any rate cut cycle amplifies both. That's the combination the smart money is looking for.
What this means if you're buying
The “Melbourne market” doesn't exist as a single thing. The inner ring is a different asset class from the outer corridor right now. The data says the outer corridor is where the institutional money is concentrating — and historically, that cohort moves 12–18 months before prices reflect it in the headlines.
The 2.5:1 ratio is a lagging indicator. The decisions behind it were made in Q3–Q4 2024.
Estait surfaces vacancy rates, days on market, price-to-rent ratios, and 5yr growth data at suburb level across all of Australia — free for your first report.