What are the key financial metrics driving the new home sales decline?

New home sales dropped 10 per cent in August, contributing to a quarterly fall of 19.3 per cent and an annual decline of 7.7 per cent. The Housing Industry Association reported that borrowing capacity shrank following three interest rate increases between February and May.

How is the rental market affecting buyers trapped outside home ownership?

National weekly rents rose 7.3 per cent year-on-year to A$701.53, growing at double Australia's 3.5 per cent inflation rate. SQM Research data indicated Hobart experienced the largest combined rent increase at 10.4 per cent to A$607.37 per week, while Sydney rents increased 5.4 per cent to A$909.53 per week.

What does the market expect regarding upcoming Reserve Bank of Australia interest rate moves?

Futures market data indicates a 76 per cent probability of the Reserve Bank of Australia raising the official cash rate to 4.6 per cent by November. A cash rate of 4.6 per cent would mark a 15-year high for Australian official interest rates.

What is the geographic impact of the decline in new home sales across Australian states?

Victoria recorded the steepest quarterly drop in new home sales at 27 per cent, followed by Queensland at 20.2 per cent and New South Wales at 17.5 per cent. South Australia saw a 10.8 per cent decline, while Western Australia recorded an 8.2 per cent fall.

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Aussie first homebuyer mortgage applications drop 20%

Q: Why did Australian first homebuyer mortgage applications drop in August?

First homebuyer mortgage applications fell 20.1 per cent year-on-year in August because rising interest rates and Federal Budget tax changes reduced household borrowing capacity.

Written by Isaac FrancisPublished Sep 15, 2026, 3:30 AM

First homebuyer mortgage applications fell 20.1% year-on-year in August.
New home sales declined by 10% over the month as borrowing capacity shrank.
Industry bodies cited Federal Budget tax changes and interest rate increases as key drivers of the decline.

Australian first homebuyer mortgage applications dropped 20.1% in the year to August, according to credit data from Equifax.

The annual decline represented the steepest drop for first homebuyers since the Reserve Bank of Australia began raising interest rates in 2022.

“Younger Australians continue to be the most impacted amid current market conditions and cost of living constraints,” said Equifax Chief Solution Officer Kevin James.

Data from the Housing Industry Association showed new home sales fell 10% in August, which the organisation attributed to recent Federal Budget tax changes and interest rate rises.

The housing market contractions occurred while national rental prices increased 7.3% year-on-year to $701.53 per week.

The decline in first home buyer activity followed three official interest rate increases between February and May.

Market futures data indicated a 76% probability of a further cash rate increase to 4.6% by November.

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