For every additional investor loan written for a new home in the June quarter, roughly 16 fewer were written for established property, according to Ray White chief economist Nerida Conisbee (pictured).
Her analysis of Australian Bureau of Statistics (ABS) lending data found new housing, including construction, accounted for 21.2% of investor loans in the quarter, up from 18% in March and 17.9% a year earlier. Conisbee described that share as historically high but said it reflects investors pulling back from existing homes rather than a substantial rise in new-home lending.
Investor loans for new homes rose by 441 over the quarter to 10,923, while loans for established properties dropped by 7,080 to 40,647. Total investor commitments fell 8.6%.
The May 2026 federal budget’s changes to negative gearing and capital gains tax were designed to steer investors away from existing homes and towards new supply. Conisbee noted the June quarter only partly reflects the post-budget period, and that higher interest rates are also weighing on investor demand.
That pressure has since intensified, with the Reserve Bank (RBA) lifting the cash rate to 4.6% on 29 September and noting that new housing loans had declined noticeably. The minutes from that meeting have sent mixed messages on whether another rise will follow.
Cotality has also reported a sharp reduction in investor demand since the tax changes, in its October 2026 Home Value Index.
Building data offered mixed signals. Dwelling completions rose 5.8% in the June quarter to 47,168, and commencements also improved. But total approvals fell 6.1% in August, including a 21.2% drop in approvals for private dwellings other than houses, such as apartments and townhouses. Detached house approvals rose 3.7%.
Conisbee cautioned that monthly approvals can be volatile and remain higher than a year ago, but flagged the apartment weakness as a concern.
Tighter rules on borrowing through self-managed superannuation funds (SMSFs), introduced after the budget and extending to new apartments, could compound the problem. Developers often rely on investor presales to secure project finance.
Conisbee said removing a pool of potential buyers may work against the government’s push for more new housing, though it is too early to measure the effect.
In Conisbee’s view, the main obstacles to building remain high construction costs, expensive finance, skilled labour shortages, and projects that are not financially viable. She said: “Changing investor tax incentives does little to address these problems.”
Property professionals share that view. In the latest National Australia Bank (NAB) residential property survey, interest rates ranked second only to construction costs as a barrier to starting new housing projects.
Her conclusion was blunt: “Redirecting investors towards new homes is not the same as getting more homes built.”
Get the hottest and freshest property and mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
