Fresh figures have found policy-fuelled demand is pushing more borrowers into bigger, riskier loans as investors chase value beyond the capitals.
Equifax’s Global Credit Trends report for 2025 found that government moves to boost home ownership coincided with a sharp lift in first home buyer activity – a powerful swing in investor lending towards non‑metro areas and a noticeable increase in the size of new mortgage limits.
Incentives fuel first home buyer rebound and regional pivot
Equifax said government policy support aimed at helping people purchase homes had clearly altered borrowing patterns and had delivered “some positive results”.
The credit reporting agency also noted that one of the clearest signs of the shift was the rebound in entry‑level buyers.
It reported that the number of first home buyers taking out loans in the final quarter of 2025 was 11.2 per cent higher than in the same quarter a year earlier, underscoring how strongly the measures had fed through to demand.
Equifax also highlighted a change in where borrowers were looking to buy, as affordability pressures deepened in the capitals.
It noted that higher inner‑city prices had prompted a growing share of activity outside the traditional metropolitan hubs.
“Rising property values have pushed both investors and owner-occupied buyers towards more rural locales, as capital and city centres become more expensive,” the report read.
Within that shift, investor lending expanded much faster than loans for owner‑occupiers.
Investor‑backed mortgage accounts in regional areas grew by 18.27 per cent in 2025, compared with 6.62 per cent growth in mortgages secured against primary residences.
The strongest state‑level contribution came from Queensland, where investor mortgage accounts are now 36 per cent higher than in 2021, while NSW and Victoria recorded increases of 8 per cent and 4 per cent, respectively, over the same period.
Lenders urged to prepare for volume spikes and local shocks
Equifax cautioned that policy‑driven swings in borrower behaviour could test credit operations and risk frameworks.
“Government interventions can cause sudden surges in application volumes. Review lending assessment frameworks, to ensure enough agility to capture changing borrower profiles,” Equifax noted.
The report also stressed that the rapid rise in lending to regional areas brought its own challenges, particularly in communities with narrow economic bases.
Equifax said that headline state or national indicators were not entirely sufficient to capture the risk in towns heavily reliant on a single industry.
“Volatility of regional markets, particularly those with high exposure to single‑industry risks, means loan providers should consider localised risk assessment policies,” it said.
With interest rates expected to remain a key pressure point, the agency pointed to a window for institutions to reposition their refinance strategies.
“Lenders have an opportunity to optimise their refinancing strategies in anticipation of higher cash rates, as consumers will be actively seeking better interest rates,” Equifax said.
Younger borrowers and larger loans underpin rising exposure
Beyond housing, Equifax identified broad‑based momentum in credit demand.
It noted that home‑loan inquiry volumes had climbed to their strongest year‑on‑year pace in over four years, supported by the same policy settings that were lifting settlement numbers.
“Mortgage inquiries posted their strongest year-on-year growth since 2021 (+12.3 per cent) driven by major government incentives for first home buyers. New credit card accounts rose during Q4‘25, driven by younger generations aged between 18 to 25,” Equifax said.
At the same time, the typical size of new mortgage limits is moving higher, with Equifax linking this to both rising property prices and the impact of incentives on borrowing capacity.
“Recent government incentives have contributed to portfolio growth, with the average limit of newly opened accounts, which rose by 8.7 per cent in Q4‘25, now reaching approximately 550K,” the report read.
Arrears steady in count, heavier in dollar terms
While overall delinquency numbers eased slightly on a quarterly basis, the composition of arrears is shifting towards larger balances.
Equifax flagged that although the number of loans more than 90 days overdue had not increased, the total value of those late‑stage arrears had risen over the year.
“Despite a quarterly decline in delinquencies, financial exposure is growing. Ninety-plus delinquencies are flat in volume but up 6.8 per cent in value compared to Q4‘24, a clear sign that credit stress is migrating to larger loan balances,” Equifax noted.
[Related: Home Guarantee expansion fuels low-deposit lending surge]
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