Overall market trends
Strong annual growth, with a slight quarterly pause. Total new housing loan commitments reached $103.0 billion across 139,794 new loans — up a robust +18.5% year-on-year by value (and +8.6% by number), though easing 3.8% on the previous quarter. Owner-occupiers made up $61.4 billion (+14.3% YoY) and investors $41.5 billion (+25.3% YoY).
Double-digit annual growth, running well ahead of the rise in loan numbers, shows rising property prices and larger loan sizes — not transaction volumes — remain the main driver. The quarterly dip reflects normal seasonality after a strong end to the prior year, rather than a change in trend.
Investor activity strengthening
Investor lending is the strongest-growing segment, up +25.3% year-on-year by value to $41.5 billion (57,342 commitments, +18.8% by number). Investors now make up around 40% of all new housing lending by value.
This momentum suggests growing investor confidence, possibly driven by:
- Strong rental yield opportunities in tight rental markets
- Expectations of ongoing capital growth
- Tax benefits and negative gearing advantages
- Improved lending conditions for investors
First home buyers: bigger loans, steady numbers
First home buyer lending reached $17.9 billion in the quarter — up a strong +17.9% year-on-year by value, though easing 6.7% on the previous quarter. By number, first home buyers were a milder +5.0% year-on-year: bigger loans, not dramatically more buyers.
The expanded First Home Guarantee — which lets eligible buyers purchase with a deposit as small as 5% — continues to support entry, but affordability stays stretched. Key dynamics:
- First Home Guarantee: a 5% deposit option keeping new entrants in the market
- Rising loan sizes: value up +17.9% year-on-year while numbers rose just +5.0%
- Competition from investors: investors are around 40% of new lending by value
- Deposit hurdles: larger deposits still needed as prices climb
Regional variations in loan sizes
Stark differences across states, on owner-occupier averages (March quarter 2026):
NSW remains the most expensive market, with loan sizes around 65% higher than TAS. This disparity reflects fundamental differences in property prices, economic opportunities and urbanisation levels across Australia. Queensland's strong performance suggests ongoing interstate migration and regional growth opportunities.
Refinancing boom
Refinancing stayed historically elevated as borrowers chase better rates:
- External refinancing (switching lenders): a record $42.9 billion from owner occupiers across 66,617 loans (up +8.7% YoY by value)
- Internal refinancing (restructuring with the existing lender): $27.3 billion across 47,755 loans (up +30.1% YoY by value)
The sustained refinancing activity reflects borrowers responding to RBA rate cuts — chasing lower repayments and better conditions. Maturing fixed-rate loans rolling to variable rates, competitive pressure among lenders, and heightened rate sensitivity are all keeping switching volumes near record highs.
The bottom line
The Australian home lending market shows broad annual strength — total commitments +18.5% year-on-year — even as the quarter eased 3.8% from a strong prior period. Investor lending is surging (+25.3% YoY) and first home buyer lending is up +17.9% YoY by value (numbers a milder +5.0%), supported by the expanded First Home Guarantee.
Loan values are growing faster than loan numbers, pointing to ongoing property price appreciation rather than a jump in transaction volumes. The market is absorbing larger loan sizes even where buyer numbers are flat.
Refinancing remains near record highs — a record $42.9 billion switched externally — as borrowers respond to RBA rate cuts by shopping for better deals or renegotiating with their current lender.
Stark regional variations persist, with NSW averaging $860K (highest) and TAS $521K (most affordable). These differences reflect fundamental disparities in property prices, economic opportunities and urbanisation across Australia, suggesting different strategies are needed for different markets.
Data source: Australian Bureau of Statistics, Lending Indicators (March quarter 2026). Analysis reflects the most recent published quarter and may change in subsequent releases.