The Top 7 Trends Shaping Australian Investor Behaviour in 2025

Australia has a vibrant and dynamic financial landscape, characterised by a diverse range of investors with varying preferences and objectives.

In this blog, we delve into the key trends reshaping investment behaviours in 2025 and explore how these shifts impact the market, investors and companies alike.

Trend 1: Rise in Self-Directed Investing Supported by Improved Investor Sentiment

In 2025, self-directed investing continues to grow in prominence, fuelled by advancements in digital platforms and the widespread availability of financial information. Self-managed superannuation funds (SMSFs) remain a cornerstone of Australia’s investment landscape, with over 1.1 million members managing nearly AUD $900 billion in assets.

Investor confidence continues to rise, with 79% of Australians optimistic about the markets by late 2024 – a sharp increase from 73% earlier in the year. This uplift in sentiment, combined with favourable market conditions, drove a nearly 50% rise in Initial Public Offerings (IPOs) on the Australian Securities Exchange (ASX), with 67 new listings in 2024 compared to 45 in 2023. As investor confidence continues to build into 2025, investor relations professionals have an opportunity to engage self-directed investors by leveraging digital tools to deliver personalised, actionable insights that align with their growing independence and market enthusiasm.

Trend 2: Surge in Exchange-Traded Funds (ETFs)

The Australian ETF industry is poised to surpass $300 billion in funds under management by the end of 2025, following a record-breaking year in 2024 with assets reaching an all-time high of A$226.6 billion. ETFs appeal to a wide range of investors due to their cost-effectiveness and diversified exposure. The transition of unlisted funds to ETF formats has also been pivotal in driving this surge.

Trend 3: Rising Participation of Younger Investors

Generational shifts are evident, with younger Australians, particularly Gen Z, becoming more active in the market. Data shows that 46% of Gen Z investors increased their portfolio contributions in recent months, outpacing older demographics. Younger investors are particularly drawn to emerging sectors such as technology and ESG-driven enterprises, aligning with their values and digital-first approach. This trend highlights the importance of tailored investor relations strategies to engage this tech-savvy, value-driven cohort.

Trend 4: Anticipation of Interest Rate Change

The prospect of interest rate adjustments is expected to have mixed implications for equity investors. Should gradual rate cuts materialise in 2025, lower borrowing costs could stimulate corporate growth and investor confidence, potentially driving up equity valuations. However, cautious market sentiment and uncertainty about the timing and extent of rate changes may lead to continued volatility in the short term, with growth-focused and dividend-paying sectors likely seeing the most pronounced favourable impacts.

Lower borrowing costs may stimulate growth-focused sectors like mining and technology, while dividend-paying sectors such as REITs and utilities stand to attract more income-focused investors seeking stable returns.

Trend 5: Data Centres are Trending: Diversification into Alternative Asset

Institutional investors are increasingly embracing alternative asset classes as a strategy to achieve alpha.

The Australian data centre market exemplifies this trend. With investments forecast to surpass $26 billion by 2030, data centres are emerging as a cornerstone of Australia’s digital infrastructure. Macquarie Group’s $5 billion commitment to Applied Digital’s AI data centres underscores the sector’s potential, as does the prediction that its investable universe will nearly double to AU$40 billion within four years. Additionally, the market is projected to grow at a compound annual growth rate (CAGR) of 6.3%, reaching USD 11.18 billion by 2034. Supporting this expansion, land acquisitions for data centres have increased significantly, with average plot sizes rising from 1.3 hectares in 2018 to 15.7 hectares in 2024.

Parallel to the rise in data centre investments is the growing appeal of private equity and infrastructure. Globally, private equity assets under management are expected to hit $6 trillion by 2025, fuelled by investors seeking higher returns in niche markets. Infrastructure investments, driven by increasing demand for renewable energy and urban development, have similarly surged, with Australian superannuation funds leading the charge in allocating capital to these resilient sectors.

Trend 6: Growing Emphasis on ESG Factors

Environmental, Social, and Governance (ESG) considerations remain a top priority for Australian investors. Investors are increasingly looking to align their investments with their values, seeking companies that demonstrate strong ESG practices. This trend is driven by a heightened awareness of sustainability issues and a desire to support businesses that prioritise ethical and responsible practices. With an increasing focus on sustainability and ethical practices, businesses must integrate ESG narratives into their investor relations strategies to attract and retain socially conscious stakeholders.

For more on this topic, check out Investability’s panel discussion featuring investment and mining industry leaders, exploring the influence of ESG on investment decisions, the role of sustainable mining practices and contrasting global approaches to ESG adoption: https://youtu.be/f2kisZ0wg-4?si=dSVqkPtdU6swDNE_

Trend 7: Property Investors Turn Their Back on Melbourne 

Investors are increasingly selling properties in Victoria due to new tax regimes, with 9% of property investors in the state selling, compared to the national average of 6%. Changes in property tax policies, including higher land taxes, are prompting investors to reassess their portfolios, with many turning to alternative markets such as South Australia. Meanwhile, the commercial property sector in Australia is expected to see a recovery in 2025, particularly in office blocks, driven by limited new supply and anticipated interest rate cuts.

Conclusion

The 2025 investment landscape is shaped by bold shifts and emerging opportunities. For businesses and investor relations professionals, understanding and adapting to these changes is essential. Investability is here to help you navigate these trends with tailored strategies that connect you to the right audiences and position you for success. Contact us today to learn how we can elevate your investor relations efforts and drive meaningful engagement.