Property investors are set to continue boosting their presence in the market over the next months, which could potentially lead to price increases, according to the latest report from the Property Investment Professionals of Australia (PIPA).

Peter Koulizos, chairperson of PIPA, said investment activity has been growing over recent months, which is a situation set to ramp up this year.

New loan commitments from investors have grown since the low point for investment activity in May, up by about 10% in December over the same period last year.

“In fact, the latest official data shows that more than $6bn worth of new investor loans were recorded in December – the highest level since July 2018,” he said.

Koulizos said the increasing number of investors in the market, coupled with the strong activity from owner-occupiers and first-home buyers, would add to the property-price pressures in many suburbs across Australia.

"Part of the reason for dwelling price rises is the low supply of properties that are hitting the market, which was also foreshadowed in last year’s survey when 71% of investors indicated that the pandemic had made them less likely to sell a property over the short term," he said.

Still, investors are more bullish in their outlook for smaller capital cities and regional areas. The PIPA survey released late last year showed that the share of investors that said regional markets were the most appealing increased to 22%.

"If you add low supply levels as well as once in a generation interest rates into the mix, then property markets are set for strong conditions for the foreseeable future," Koulizos said.

The latest figures from CoreLogic showed that dwelling values have already surpassed pre-COVID levels by 1% in January.

Every capital city and broad rest-of-state region recorded a rise in housing values over the month, with Darwin reporting the highest growth at 2.3%.