Loans to housing investors fell 11.4 per cent in the June 2026 quarter, dragging the total number of loans used to buy homes down 6.4 per cent, according to Australian Bureau of Statistics figures released on 14 August. Owner-occupier purchase loans were down 2.9 per cent over the same three months. Master Builders Australia says May’s Federal Budget is behind the slide, and warns the residential sector is heading for an “investment strike”.
Those figures landed alongside a media release from Master Builders Australia, which used the ABS lending data to argue the Government’s tax settings are pulling money out of the housing pipeline at exactly the wrong time.
The quarter that only half-caught the Budget
Master Builders Australia chief economist Shane Garrett made the point that the ABS series runs from early April to late June, so a decent slice of it landed before the May Budget was handed down. On his reading, the real hit is bigger than the headline number.
“Even so, today’s figures show that drastic changes are underway in our housing market”
That was Mr Garrett’s read on the quarter, and he tied the fall directly to confidence among the people who fund new stock.
“The fall in lending suggests investors and prospective home builders are becoming more cautious at a time when the industry needs greater confidence and investment to meet our Housing Accord targets. Additional costs and uncertainty created by other Budget changes including to trust arrangements risk further dampening investment activity.”
Worth keeping in mind who’s talking. Master Builders is an industry association making a case for its members, and the loan figures are ABS data, not the association’s own. The gap between the two, the leap from a quarter of lending numbers to a four-year forecast, is where the argument sits.
”Australia can’t afford an investment strike”
Master Builders Australia chief executive Denita Wawn put the blame on federal policy settings, and framed the fix around the small businesses that actually swing the hammers.
“If we want more homes, roads, schools and essential infrastructure, we need to back the small construction businesses that build them. Australia can’t afford an investment strike in the residential sector.”
Ms Wawn wants the proposed trust changes softened with a carve-out or grandfathering for existing small businesses, plus accelerated depreciation and a lift to the Instant Asset Write-Off. She cited independent modelling of the May Budget’s impact showing net new housing supply falling by 8,700, rents rising $9 a week, and 3,800 construction jobs going over the next four years. The release does not name who did the modelling.
That estimate, she said, was made before the SMSF decision was factored in.
“The tax increase on trusts and the associated costly restructure fees, as well as the ban on SMSF investment in housing, will make this picture even worse. Those policies need to be amended to increase housing supply and construction activity.”
Lending is the front of the queue, not the back
A loan approval isn’t a job. It’s the thing that has to happen before a job exists. Contracts get signed off the back of finance, and only then does anyone book a surveyor, a piling rig or a slab crew. Which means a quarter of weak lending numbers doesn’t show up on site this month. It shows up as a quiet stretch in the diary later on, and by the time you feel it, the cause is months in the rear-view mirror.
The split in the data matters too. Owner-occupier purchase loans slipped 2.9 per cent, which is a wobble. Investor loans fell 11.4 per cent, close to four times as steep. Investors are the money behind a big share of rental stock and the medium-density product that a lot of townhouse and unit builders live on. When that finance dries up, the pain isn’t spread evenly across the trades. Builders working detached custom homes for owner-occupiers cop less of it than the crews who chase multi-unit sites, where a single financing decision can decide whether eight slabs get poured or none.
Sequencing then runs the way it always does. No slab means no frame, no frame means the roofers, sparkies and plumbers behind them get pushed right, and the fitout trades at the tail of the job wear the delay last and longest. That lag is why a soft lending quarter is worth watching even if your own next three months are booked solid.
The write-off ask, in plain terms
The Instant Asset Write-Off and accelerated depreciation asks are the part of the Master Builders shopping list that sits closest to a two-ute operation. Both change the maths on whether you buy the second ute, the new laser level or the mini excavator this financial year or keep patching the old one. Thresholds and eligibility rules shift with each Budget cycle, so nothing has changed yet, and anyone planning a purchase around it should check the current rules with the ATO or their accountant before signing anything.
The number to watch is the September 2026 quarter lending release. It’ll be the first full three months after the Budget, without the pre-Budget weeks propping up the average. If investor lending falls again from an already lower base, the argument stops being a forecast and starts being a booking sheet.
Frequently asked questions
How much did investor home lending actually fall?
Loans to housing investors fell 11.4 per cent in the June 2026 quarter, according to ABS figures released on 14 August. Owner-occupier purchase loans were down 2.9 per cent, and total loans used to buy homes fell 6.4 per cent.
Why does a drop in lending matter to tradies on site?
A loan approval sits at the front of the pipeline, before contracts, slabs and frames. A weak lending quarter doesn’t show up on site straight away; it shows up as a quiet stretch in the diary months later, with fitout trades at the tail of the job wearing the delay longest.
What does Master Builders want changed?
Master Builders chief executive Denita Wawn wants the proposed trust changes softened with a carve-out or grandfathering for existing small businesses, plus accelerated depreciation and a lift to the Instant Asset Write-Off.
When will the next lending figures show the Budget’s full effect?
The September 2026 quarter lending release is the one to watch. It will be the first full three months after the May Budget, without the pre-Budget weeks propping up the average.
Sourced from Master Builders Australia, Australian Bureau of Statistics. Original article.
