June-quarter ABS lending figures have revealed a broad mortgage-market pullback, with investor activity leading the decline.
Australia’s home-loan market weakened across borrower types in the June quarter, with Australian Bureau of Statistics (ABS) data showing new dwelling commitments falling 5.4 per cent, with investor lending recording its steepest quarterly fall in almost four years.
The ABS, Australia’s national statistical agency, reported 134,225 new loan commitments for dwellings in the June quarter of 2026 – with owner-occupier commitments falling 3.3 per cent to 81,626, while first home buyer (FHB) commitments declined by 2.9 per cent to 29,319.
Investor lending experienced the sharpest contraction, falling 8.6 per cent over the quarter.
While investor commitments remained 2.8 per cent higher than a year earlier, the annual growth rate slowed sharply from 19.4 per cent in the March quarter.
“Lending fell across all borrower types this quarter and returned to similar levels to this time last year,” ABS head of finance statistics Mish Tan said.
Tan said RBA cash rate hikes and shifting property tax settings had reshaped the lending environment during the quarter.
“Lending conditions continued to change in the June quarter, with the Reserve Bank of Australia increasing the cash rate for the third time in 2026. Changes to negative gearing and capital gains tax were also announced in the federal budget in May, to commence in July 2027,” she said.
Investor borrowing leads the decline
The investor segment accounted for the sharpest fall in the ABS data, both by commitment numbers and loan values.
New investor commitments fell 8.6 per cent in the June quarter, while the value of investor lending dropped 10.2 per cent to $37.1 billion.
NSW, Victoria, and Queensland were the main drivers of the investor retreat, with quarterly declines of 15.5 per cent, 14.2 per cent, and 10.1 per cent, respectively.
Yet these falls were partly offset by quarterly increases in the Northern Territory (+12.8 per cent), the ACT (+8.7 per cent), and Tasmania (+5.3 per cent).
“The fall in investor loans in the June quarter was the largest fall since September quarter 2022,” Tan said.
She added that the annual figures underscored how rapidly investor momentum had eased.
“Annually, growth in investor loans slowed from 19.4 per cent in the March quarter to 2.8 per cent this quarter,” she said.
Owner-occupier lending also softened, with the value of new commitments falling 1.9 per cent to $60.5 billion.
Total housing-loan values declined 1.9 per cent to $97.6 billion, while FHB lending values edged 0.2 per cent higher to $18.4 billion despite the fall in commitment numbers.
Refinancing activity also eased across both owner-occupier and investor cohorts, with internal owner-occupier refinances dropping 7.4 per cent to 43,848 and external owner-occupier refinances declined 0.9 per cent to 66,449.
A total of 15,331 investor loans were refinanced internally, down 5.6 per cent over the quarter, while external investor refinances fell 2.3 per cent to 36,597.
Personal and business finance diverge
Personal-finance and business lending, meanwhile, were mixed in the June quarter.
The value of road-vehicle personal loans fell 0.9 per cent from the March quarter to $9.7 billion, although it was 7.1 per cent higher than a year earlier.
Other personal loans – covering personal investment, travel and holidays, other vehicles, and household goods – fell 3.2 per cent quarter on quarter to $5 billion, but were up 21.6 per cent annually.
Business lending presented a more resilient picture, with construction-loan commitments rising 2.9 per cent over the June quarter to $12.5 billion, despite being 0.2 per cent lower than a year earlier.
The value of loans for the purchase of business property increased 4.4 per cent during the quarter to $27.2 billion and was 18.9 per cent higher year on year.
Demand data points to continued weakness
The ABS figures cover commitments made during April to June, and more recent application and inquiry data indicate that the slowdown continued into July.
Equifax recorded a fourth consecutive monthly annual fall in mortgage demand in July, with demand 16.4 per cent lower than a year earlier.
The credit agency added that FHB demand fell 19.1 per cent annually in July, following a 20.9 per cent decline in June.
Recent major-bank disclosures have also revealed a significant post-budget slowdown in mortgage applications.
Westpac said average monthly mortgage applications fell 11 per cent quarter on quarter to 29,000 in the third quarter of 2026.
Its post-budget run rate was 26,000 applications a month, 20 per cent below the second-quarter level.
The bank said investor applications were down 26 per cent following the budget, compared with an 18 per cent fall in owner-occupier applications.
In its full-year results, the Commonwealth Bank of Australia reported that mortgage applications were 17 per cent lower in June than a year earlier, with investor applications down 28 per cent from the May budget and owner-occupier applications down 9 per cent.
ANZ also recorded lower flows, reporting a 12 per cent fall in mortgage applications between the 12 May federal budget and the end of July.
Broker networks see similar pattern
Large broker groups have also reported a more pronounced pullback among investors than FHBs.
Lendi Group CEO Sebastian Watkins told The Adviser recently that Aussie Home Loans data had shown a noticeable shift in borrower behaviour following the federal budget.
“Since the announcement on May 12, first home buyer lodgements have declined more than 20 per cent,” he said.
“Over the same period, investor lodgements declined more than 25 per cent indicating a much sharper pullback.”
Loan Market executive chairman and CEO Sam White also reported a comparable decline in the group’s June application data when measured against the four weeks before the budget.
“Loan Market data shows first home buyer loan applications fell by 16 per cent in June compared to the four weeks before the budget announcement,” White said.
“Loan Market data shows investor loan applications fell by 19 per cent in June compared to the four weeks before the federal budget announcement.”
[Related: RBA flags ‘sharp’ fall in new housing commitments]
Want to see more stories from trusted news sources?
Make The Adviser a preferred news source on Google.
Click here to add The Adviser as a preferred news source.
