New home loan data reveals largest investor lending plunge on record amid rate rises, negative gearing changes
Investors are fleeing the housing market in record numbers, following aggressive rate hikes and tax changes. But first homebuyer numbers are plunging too despite Labor’s plan to help the young.
Investors are fleeing the housing market in record numbers but first homebuyers are staying away too following aggressive rate hikes and Labor’s tax changes designed to help more young people get into the property market.
The number of investor landlords taking out a mortgage plunged by close to a third over just three months.
New property investor loans dived by 30.6 per cent during the September quarter while the 8.6 per cent decline in first homebuyers during that period was even steeper than the overall 5.3 per cent drop in owner-occupiers, new Australian Bureau of Statistics data revealed on Wednesday.
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By continuing you agree to our Terms and Privacy Policy.Total loan commitments fell by 15 per cent between the start of July and the end of September, which was the largest in records going back 24 years.
This also marked the third consecutive quarterly decline in both the number and value of investor loans.
“While lending activity fell across all borrower types in the September quarter, the decline was sharpest for investors,” the ABS’s head of finance statistics Mish Tan said.
“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.”
The average new investor loan fell by 2.4 per cent over three months to $691,000, which was the smallest mortgage size for landlords in a year.
When it came to owner-occupiers, the average new mortgage was $736,000 - a level smaller than the end of 2025.
The overall number of new home loans fell by 15 per cent to 111,878 as the value of new loans for both investors and owner-occupiers plunged by 15.5 per cent to $81.2b, marking the largest quarterly fall since the ABS series began in the September quarter of 2002.
Over the year, the number of investor loans plummeted by 38.5 per cent, which was significantly higher than the 21.4 per cent drop in new total loan commitments.
The annual 12.3 per cent drop in first homebuyer loans was even steeper than the 9.8 per cent fall in owner-occupier loans.
The fall in new home loans was revealed just hours after the Commonwealth Bank, Australia’s biggest home lender, revealed in a trading update that home loan application volumes had dived by 16 per cent during the September quarter.
This occurred as home loan arrears, of borrowers being 90 days or more behind on their repayments, soared to a seven-year high of 0.8 per cent
The drop in new mortgages followed the Reserve Bank’s February, March, May and September rate hikes that took the RBA cash rate to a then 15-year high of 4.6 per cent.
The data pre-dated this month’s hike that took the cash rate to a fresh 18-year high of 4.85 per cent, but covered Labor’s Budget changes that scrapped negative gearing on established homes, exchanged after May 12, from July next year.
The 50 per cent capital gains tax on investment properties is also being replaced with a minimum new 30 per cent tax and indexation for inflation.
