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Investor home loan approvals fall sharply after Reserve Bank hikes rates to 18-year high
Investor home loan commitments fall sharply after the RBA raises rates to an 18-year high, its data shows.
Key points
- Housing loan commitments are 27 per cent below their November 2025 peak, according to RBA figures released on Tuesday.
- The RBA said the May budget's changes to negative gearing and capital gains tax reduced after-tax returns on investments in established
- Cotality said capital city home values have already fallen 8.1 per cent from their March peak.
Why it matters. The RBA said housing credit growth is expected to decline further over coming months as recent price falls flow through, and Tuesday's rate rise will further weaken investor demand.
The Reserve Bank of Australia lifted interest rates to an 18-year high on Tuesday, and its figures showed housing loan commitments 27 per cent below their November 2025 peak. Investor lending fell hardest, a record drop for any hiking cycle, while owner-occupier lending dipped only modestly. The RBA linked the investor slump to the May budget's abolition of negative gearing and curbs on the capital gains tax discount.
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Investor home loan approvals fall sharply after Reserve Bank hikes rates to 18-year high
The Reserve Bank hiked interest rates to an 18-year high on Tuesday, adding to borrowing costs and weighing on housing demand. Investor home loans have recorded their biggest fall on record, according to reporting by The West. Australia's top banking official points to a larger fall in investor lending than in owner-occupier lending as evidence that Labor's budget tax changes are having an impact. The government has shared credit for the housing downturn with the central bank's rate decisions. Another rate rise means further falls in housing activity are expected.