Australia’s new investor housing loan value falls nearly a third in quarter

The value of new housing loans to investors in Australia fell nearly a third in the September quarter of 2026, the largest quarterly decline in records beginning in 2002. The Australian Bureau of Statistics (ABS) said the fall was nearly twice the previous record, The Guardian said.

The decline followed the government’s May budget announcement of changes to capital gains tax for investors and a ban on negative gearing for new landlords buying existing homes. Negative gearing allows investors to offset net investment losses against other income, such as wages.

A background source describes a concession under which only half the gain from selling an investment property held for more than 12 months is included in taxable income.

Overall new housing lending fell 15% in the quarter, while owner-occupier lending fell 5.3% and first-home-buyer lending fell 8.6%. The number of new investor loans to build a home, not the number of completed homes, fell 12%.

What may be driving the decline

ABS finance statistics head Mish Tan said the data suggested that factors beyond rising borrowing costs were influencing investor activity. These included the possible effects of tax changes and expectations of lower house prices; Tan did not establish that the tax changes caused the decline.

Treasurer Jim Chalmers said the reforms were intended to help first-home buyers, with benefits expected over years rather than months, and that the data was beginning to show less competition from established investors for existing homes. Shadow housing minister Andrew Bragg argued that higher housing taxes were discouraging investment when Australia needed more homes and called for the taxes to be repealed.

More borrowers fall behind

Commonwealth Bank’s quarterly update showed the share of its lending associated with borrowers at least 90 days behind on repayments rose from 0.73% to 0.8%. Its arrears rate was last higher in 2014.

Morningstar senior equity analyst Nathan Zaia said arrears were rising across the banking sector and probably had not peaked, although the increase was from an unusually low base. S&P Global ratings director Nico de Lange said the rise did not appear to indicate significant stress across the banking sector, but that he was watching closely after five interest-rate increases in the year.

The Coalition has promised to repeal the investor tax changes if it wins government.