Fresh data has revealed a modest August lift in first home buyer loan lodgements, while investor pre-approvals have fallen significantly.
Major brokerage Loan Market has reported a slight August lift in first home buyer (FHB) loan lodgements, while investor pre-approvals fell 55 per cent annually, signalling a more cautious investor cohort heading into spring.
The brokerage’s August loan-trends report found that FHB loan lodgements were 12 per cent lower than a year earlier, but rose 6 per cent from July and 7 per cent from June.
Despite that late-winter improvement, FHB lodgements remained down 4.4 per cent year to date compared with the same point in 2025.
Loan Market credit expert Shay Waraker said the figures showed that borrowing activity remained weaker than last year, even as FHBs began to show signs of returning to the market.
“Loan lodgements are down across the board compared to last year, however August did see some green shoots from first home buyers,” she said.
Yet she added that the improvement in FHB activity could be vulnerable if the Reserve Bank lifts the cash rate again this year, as anticipated by all four major banks.
“It’s positive momentum, though if the cash rate does increase again this year as many economists have predicted, borrowing capacities will be impacted, which could lead to a slow down,” Waraker said.
Investor appetite remains low
Meanwhile, investor activity weakened more decisively in August, with Loan Market noting that investor loan lodgements fell 15.75 per cent year on year and had declined 6 per cent from July.
The annual trend differs from the year-to-date picture, with investor loan lodgements still 6.5 per cent higher than in the corresponding period of 2025.
The more pronounced warning signal was in pre-approvals, with investor pre-approvals dropping 55 per cent from August 2025, while owner-occupied pre-approvals fell 12.6 per cent over the same period.
Waraker said the decline, particularly among investors, could shape the tone of the spring selling season.
“Pre-approvals were lower in August than last, particularly for investors. This could indicate lower competition and a slower than usual spring selling season,” Waraker said.
Broader demand remains weak
Loan Market’s figures align with Equifax data that has shown mortgage demand remaining subdued nationally.
The consumer credit reporting agency recorded a 14.1 per cent annual fall in overall mortgage demand in August, the fifth consecutive monthly decline, although it was a smaller fall than July’s 16.4 per cent contraction.
FHBs experienced a steeper pullback in Equifax’s nationwide data, with mortgage demand down 20.1 per cent year on year.
Equifax chief solutions officer Kevin James said the figures reflected households adapting to an extended period of high interest rates and the prospect of further tightening.
“Pulse data for August 2026 highlights a market adjusting to a sustained higher interest rate environment, with many expecting at least another rate increase before the end of the year,” he said.
“While overall mortgage demand remains down, it is positive in some respects to see it has not continued its downward trajectory from the past few months and has softened slightly.”
He added that households were prioritising near-term financial resilience over large new debt commitments.
“However consumers still appear to be apprehensive, with households appearing to be actively re-evaluating their commitments, choosing to hold off on taking on massive new capital obligations while using short-term and unsecured credit to maintain household finances,” James said.
[Related: Broker says property downturn creating opportunities for borrowers]
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.
