Sunita Somvanshi
Australian New Home Loans Plunge Record 15% as RBA Rate Hikes and COP31 Clash
New Australian mortgage commitments fell by a record 15.0% in the September quarter, the steepest quarterly drop in 24 years, as five Reserve Bank rate hikes collided with federal Budget reforms to capital gains tax and negative gearing.
The Australian Bureau of Statistics lending indicators show new loan commitments dropped to 111,878 in the September quarter, down 15.0% from June and 21.4% year-on-year. Investor loans plunged 30.6% quarter-on-quarter and 38.5% year-on-year to 35,301, driven by a 46.2% drop in investor purchases of existing homes. Owner-occupier loans fell 5.3% quarter-on-quarter and 9.8% year-on-year to 76,578. First-home buyer loans dropped 8.6% quarter-on-quarter and 12.3% year-on-year to 26,415.
If you are a first-home buyer with a 20% deposit saved, the 30.6% quarterly collapse in investor loans removes your biggest auction competitors and points to flat or falling house prices over the next six months. On a $750,000 home that drops 10% to $675,000, your monthly repayment at 7.0% ($3,593) is only $186 higher than buying at $750,000 before the five 2026 rate hikes ($3,407 at 5.5%) — though APRA’s 3% bank buffer is pushing more borrowers toward non-bank lenders.
AI Boom Drives Copper Up 33% and Albanese’s COP31 Pitch vs 38 Fossil Approvals
The housing slowdown coincides with two structural shifts. ABS producer price indexes show the global AI data centre boom drove Australian residential construction copper pipe prices up 33% and electrical cabling up 26% in nine months. ANZ CEO Nuno Matos told a parliamentary hearing that AI data centres are sparking a global “competition for capital.” Meanwhile, Prime Minister Albanese co-hosted COP31 in Antalya, Türkiye with a 192-strong delegation and a $2.2 million hospitality bill, while facing criticism from Senator David Pocock and ACF CEO Adam Bandt for omitting fossil fuels after approving 38 coal and gas projects including the Araluen coal mine and Marlboro LNG.
During Thursday’s parliamentary hearing, Labor MP Ed Husic cited an Australia Institute report showing banks make $266,000 profit on an average $731,000 mortgage — up $40,000 since February’s rate hikes began. ANZ CEO Nuno Matos claimed mortgages are “one of the least profitable business in banking in Australia” while warning that AI data centres are competing globally for capital, the exact AI boom that ABS data shows pushed Australian home-building copper pipes up 33% in nine months.
Why did new Australian home loans drop by a record 15% in the September quarter? New Australian mortgage commitments fell by a record 15.0% (or $15 billion) in the September 2026 quarter after the Reserve Bank’s five 2026 interest rate hikes (to 4.85%) collided with federal Budget reforms to the Capital Gains Tax discount and negative gearing. Investor loans plunged 30.6% in the quarter, while owner-occupier loans fell 5.3%.
The official announcement is expected in October. Check back for updates.
