- The number of new home loans fell 15% in the September quarter, led by a collapse in investor lending
- The number of new investor loans plunged 30.6% over the quarter
- Owner occupier and first home buyer lending also continued to fall
The number of new loan commitments for housing fell 15% in the three months to December, the largest quarterly fall on record.
The crash was led by a 30.6% collapse in the number of new investor loans compared to the previous quarter, according to the latest Australian Bureau of Statistics lending data.
Home lending fell across the board, with the number of new owner occupier home loans down 5.3% for the quarter and first home buyer loan commitments 8.6% lower.
Loan values also down
The value of new home loans was also down 15.5% overall, reflecting a fall in loan values across all sectors during the quarter.
It was the largest quarterly fall in value since the data series began in 2002.
New owner occupier home loans fell 15.5% by value for the quarter, with first home buyer loans dropping in value by 8%.
Investor loans plummeted 32.3% by value compared to the June quarter.
Investors leave the market
The new figures mark the third consecutive quarterly decline in both the number and value of investor loans, the biggest quarterly fall on record for both measures.
ABS head of finance statistics Dr Mish Tan said while activity fell across all borrower types, the decline was sharpest for investors.
"Our data suggests that investor activity is being influenced by factors beyond increasing borrowing costs, including the potential impacts of tax changes and expectations of lower house prices," she said.
The number of new investor home loans had previously declined 8.6% (10.2% lower by value) in the June quarter which took in a roughly six-week period after the federal government announced new investor tax changes in the May federal budget.
The latest data also reflects the impact of ongoing interest rate increases.
Last week, the Reserve Bank delivered its fifth cash rate increase for 2026, taking it to 4.85%, its highest level in 18 years
See also:
- RBA delivers fifth cash rate hike of 2026, taking cash rate to 4.85%
- No more cash rate increases? Let's take stock
Investors not building either
It seems the government's plan to steer investors towards constructing new homes to retain some tax benefits hasn't taken hold in the high interest rate environment.
The number of investor loans for the construction of new dwellings fell 16.2% compared to the previous quarter.
However, with the fall less dramatic than overall investor lending, it suggests some investors may be shifting from purchasing established homes to new builds.
Before the September quarter data was released, federal housing minister Clare O'Neil said the reduction of investor borrowing was a sign of progress, as it meant more first home buyers were entering the housing market.
This was not entirely supported by the data which also reflects the increased difficulty of first home buyers qualifying for home loans as interest rates have risen.
See also: What is home loan serviceability and how is it calculated?
Property data analyst Cotality also said the steep downturn in the property market had impacted buyer confidence with fewer buyers interested in entering a falling market.
See also:
The 5.3% fall in new loans to owner occupiers followed a 4% fall in the June quarter.
Overall, lending to owner occupiers was 9.8% lower than a year ago while first home buyer lending was 12.3% lower.
The quarterly fall in owner occupier lending was driven largely by Queensland (down 10.4%) and Victoria (down 6.6%).
CBA's loan arrears hit six-year high
The latest lending data came on the same day Australia's biggest home lender Commonwealth Bank revealed its home loan arrears figure was at its highest rate in six years.
CommBank reported 0.8% of its home loan customers were 90-plus days past due on their repayments, up seven basis points on the previous quarter.
That compares with a 90-day arrears figure of 0.64% in September 2019.
CommBank also revealed its home loan application volumes had dropped by 16% compared to the same quarter a year ago.
In previous results released during the August reporting season, all four big banks had reported new home lending had fallen by between 12-20% in the wake of the federal budget tax changes.
There have been two more cash rate increases since that time - in September and November - putting further pressure on existing borrowers and deterring new borrowers from buying into a rapidly falling property market.
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| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
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| Promoted | Disclosure | ||||||||||
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| Promoted | Disclosure | ||||||||||
6.14% p.a. | 6.17% p.a. | $3,043 | Principal & Interest | Variable | $0 | $0 | 60% |
| Promoted | Disclosure | ||||||||||
6.20% p.a. | 6.20% p.a. | $3,062 | Principal & Interest | Variable | $0 | $0 | 90% | Disclosure |
