The headlines this month said investors are walking away from the housing market. The data says something more interesting. Investor numbers did fall, and they fell hard. But the loans still being written are the biggest on record in Western Australia, Queensland and South Australia.
Fewer investors. Bigger loans. That is the story of the June quarter.
Western Australia recorded the largest move of any state. The average investor loan there rose from $654,000 in the March quarter to $678,000 in the June quarter, a record for the state. Queensland reached $713,000 and South Australia $642,000, both records. Tasmania hit a record too, at $524,000.
Meanwhile the average investor loan fell in New South Wales, from $858,000 to $851,000, and in Victoria, from $607,000 to $604,000. The ACT was flat.
So why is the average going up in some states while the number of loans goes down?
Because the borrowers still transacting are not the marginal ones. When conditions tighten, the buyers who were stretching to get in tend to step back first. The ones who remain are better capitalised, and they are buying in the markets where the fundamentals still stack up: firm population growth, tight rental vacancies and comparatively better yields.
The Volumes Tell the Other Half of the Story
Nationally, the number of new investor loans fell 8.6 per cent in the June quarter, a drop of 4,966 loans. The ABS notes this was the largest quarterly fall since September 2022.
New South Wales led the retreat at 15.5 per cent, followed by Victoria at 14.2 per cent and Queensland at 10.1 per cent. Only three jurisdictions recorded a rise: the Northern Territory at 12.8 per cent, the ACT at 8.7 per cent and Tasmania at 5.3 per cent, all markets with a comparatively strong rental return profile.
The value of investor lending fell 10.2 per cent to $37.1 billion, a fall of roughly $4.2 billion on the quarter. Total new home lending fell 5.2 per cent to $97.6 billion.
What is Driving it?
The ABS points to two things. The Reserve Bank raised the cash rate for the third time in 2026, and the May federal Budget announced changes to negative gearing and capital gains tax that are due to commence in July 2027.
We are not going to tell you those changes had no effect. They clearly did, and the June quarter is the first full read on borrower behaviour after the announcement. What we would say is that a reaction to an announcement is not the same as a permanent structural shift. The rules do not take effect for another year, and the market is still working out what that means in practice.
Some Context the Headlines Left Out
Annual growth has slowed, not reversed. The value of new home loans was still 6.8 per cent higher than the June quarter of 2025, though that is well down on the 19.1 per cent annual growth recorded in the March quarter.
The owner-occupier picture is more mixed. By volume, owner-occupier lending sat 1.6 per cent below where it was a year earlier, which the ABS notes is the first annual fall since September 2023.
On prices, forecasters do not agree. KPMG expects national house values to fall 1.1 per cent across 2026 before rising 3.4 per cent in 2027, with units holding up better. ANZ has taken a more bearish view, forecasting a larger fall in capital city dwelling values this year. Both expect a recovery to begin from a weaker base. Worth reading a few forecasts rather than one.
So What Does This Mean for You?
It means the market has not closed. It has narrowed.
Activity is still there, it has just moved. It has moved toward the states where averages are climbing, toward property types with stronger yields, and toward borrowers who have their structure sorted before they start looking. Serviceability, deposit position and the way a purchase is funded matter more in a market like this one than they did 18 months ago, because there is less room to absorb a mistake.
If you want to work through what your borrowing position looks like right now, reach out to our team for a no-commitment, no-jargon chat. Finance made simple.
Source: ABS Lending indicators, June quarter 2026, released 14 August 2026. Figures are as reported by the ABS and are seasonally adjusted unless noted otherwise.
This article is general information only. It does not take into account your objectives, financial situation or needs, and it is not financial, tax or investment advice. Consider whether it is appropriate for you and seek advice from a qualified professional before acting.