New lending to property investors fell sharply in the June quarter, as higher interest rates and recent tax changes continued to influence Australia’s housing and mortgage markets.

Australian Bureau of Statistics data showed the total number of new home loans fell by 5.4 per cent over the quarter, with lending declining across all borrower types.

Investor Lending Leads the Decline

Investor loans recorded the largest fall, dropping 8.6 per cent in the June quarter after declining 4.7 per cent in the previous period.

The number of investor loans remained 2.8 per cent higher than a year earlier, although the total value of investor lending was down 10.2 per cent.

The slowdown follows three Reserve Bank of Australia interest rate increases earlier in 2026, along with changes to the tax treatment of residential property investment.

Established Properties See a Sharper Fall

The largest change occurred in lending for established investment properties, where the number of loans fell by 14.8 per cent.

At the same time, investor lending for newly built properties increased by 4.4 per cent to a record high.

This shift may reflect recent policy changes that continue to provide more favourable tax treatment for qualifying new housing compared with established investment properties.

What Could This Mean for Home Buyers?

The sharp fall in investor lending for established properties may reduce competition for some first-home buyers and other owner-occupiers.

Together with softer investor demand, this may contribute to a more balanced housing market and could improve affordability for some buyers over time.

Higher interest rates continue to influence borrowing capacity and repayments, but reduced competition in parts of the established housing market may create more opportunities for some buyers.

Investment Is Shifting Towards New Housing

The rise in investor lending for new builds may support additional housing and rental supply by directing more investment towards newly constructed properties rather than existing homes.

For buyers and investors, these changing market conditions are a reminder to consider borrowing capacity, property type, cash flow and the potential impact of future interest rate changes when weighing up a property purchase.