The ABS released the Lending Indicators data for the March quarter 2026 today, which provides the latest statistics on housing finance commitments. This dataset reflects borrower-accepted commitments from authorised lenders with significant lending activity, which for housing finance means at least $3.0 billion in housing credit.

“Investors are playing an increasingly important role in the housing market as the rise in the regulatory and tax imposts on new homes continue to make the cost of building a new home out of reach of first home buyers, especially in key markets of Sydney, Melbourne and Brisbane.

“This data on the importance of investors to increasing housing supply has only been available since 2019. The ABS commenced collecting this data following errors in understanding ABS data prior to the 2019 election campaign that led to proposals to limit negative gearing to new homes only. 

“Good public policy relies on good data and since the 2019 election, the ABS has collected and reported on the volume of loans issued to investors that purchase or construct new homes. 

“While it might initially appear that limiting negative gearing to new homes only would result in an increase in new home supply. This logic only makes sense in a theoretical environment where there are only two investment options, new homes or established homes.

“In the real world, capital is mobile. Investors aren’t making the decision to invest in new, or established homes. They can also redirect investment to industrial property, commercial property, shares or other assets. 

“Taxing established homes more will likely lead to less investment in housing, and therefore less investment in new home building. This will worsen the supply problem.

“The Federal Budget last night made it clear that this new tax on established homes, with the ‘carve out’ for new home building, will reduce the supply of new homes over the next decade by 35,000 homes. 

“The Henry Tax Review recommenced against increasing taxes on investors until the supply problem was resolved.

“When Paul Keating reintroduced negative gearing in 1987, he stated that it was to increase the supply of new homes.

“Australia’s housing affordability problem is fundamentally a shortage of homes compared to the number of households. It can viewed as if we are trying to fit 11 million households into 10 million homes.

“Policies that increase the cost or risk of investing in housing do not resolve that shortage - they make it worse.

“The reduction in supply that follows will see rising rental prices, rising home prices as the disequilibrium continues to deteriorate, but at a faster pace.

“Recent economic modelling by Qaive and Tulipwood Economics arrived at a similar outcome to Treasury modelling and found that restricting negative gearing to new homes only would reduce supply by 22,700 homes over the next five years. It would reduce GDP, lower construction employment, and increase rents.

“We cannot tax our way to increased housing supply.

“The government’s policy to may increase the relative attractiveness of new dwellings compared with established dwellings, but still reduce the absolute attractiveness of residential investment overall. 

“Established investors, institutional investors, self-managed super funds and those with large housing portfolios are not likely to be impacted by limiting negative gearing, as they have alternative incomes to offset.

“We have not been in a situation where housing was treated differently from other asset classes, so the distortion these policies aren’t easy to model. It is possible that ‘mum and dad’ investors might access other corporate structures to avoid this additional tax. 

“These policies will add to the complexity and distortions in the housing market and lead to less efficient outcomes, and fewer homes.

The number of owner-occupier loans issued nationally for the purchase and construction of new homes fell by 1.7 per cent in the March quarter 2026 to 13,890. The Australian Capital Territory recorded a 65.3 per cent increase over the quarter, followed by Western Australia (+4.7 per cent), while Queensland remained unchanged. New South Wales (-0.3 per cent) and South Australia (-0.4 per cent) recorded modest declines, while the Northern Territory (-41.1 per cent), Tasmania (-10.2 per cent) and Victoria (-10.1 per cent) recorded larger declines.

The number of investor loans issued nationally for the purchase and construction of new homes remained relatively unchanged (-0.3 per cent) in the March quarter 2026 to 10,300. Tasmania recorded the largest increase over the quarter (+32.9 per cent), followed by South Australia (+10.5 per cent), Queensland (+3.3 per cent) and Victoria (+2.6 per cent). Declines were recorded in Western Australia (-17.4 per cent), the Northern Territory (-11.5 per cent), the Australian Capital Territory (-6.8 per cent) and New South Wales (-5.1 per cent).

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