New Property Loans And Wages Growth Down; It’s All Fine!

The ABS this week released their latest data on Lending Indicators which is a quarterly estimate of new borrower-accepted finance commitments for housing, personal and business loans and also the Wage Price Index for March which measures changes in the price of labour, unaffected by compositional shifts in the labour force, hours worked or employee characteristics. We are seeing a significant chilling effect based on this data, which will likely reduced property transaction momentum and prices ahead. Remember that investors currently account for about 20 per cent of total mortgages, and about 40 per cent of new mortgage flow. The ABS reported that the number of new home loans fell 6.2 per cent to 139,794 in March quarter 2026. Falls were recorded across all borrower types this quarter, following strong growth throughout 2025 and cash rate rises in February and March. So we are seeing a significant shift in mortgage lending, as the higher interest rates bite, and as borrowing power is reducing, meaning for the same level of income, households are not able to borrow as much from the banks as before the recent hikes. If you then consider the potential impact of the budget on borrowing power, this is now also having a chilling impact on borrowing capacity. One mortgage broker estimated that for a typical property investor loan, before the changes, based on a substantial $250k income, the investor was able to access $964k to $1.015m whereas now this had dropped to $712k to $722k, a significant drop. Morgan Stanley analyst Richard Wiles quoted in the AFR said the changes to negative gearing and capital gains tax discounting “will be bad for bank share prices”. “The budget will have a negative impact on housing market sentiment and the mortgage market,” he told clients. “In our view, favourable tax treatment is one of the reasons why there has been a 30-year housing ‘super-cycle’ in Australia. We are entering uncertain times for households, banks and the broader economy, and this is before the full impacts of the frozen straits are felt. Calling for property price rises in this context is brave a best, so we will see. No, all is not fine. http://www.martinnorth.com/ Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/ Go to the Walk The World Universe at https://walktheworld.com.au/ Find more at https://digitalfinanceanalytics.com/blog/ where you can subscribe to our research alerts Please consider supporting our work via Patreon: https://www.patreon.com/DigitalFinanceAnalytics The full detailed set of post code data is available as a subscription service. Or make a one-off contribution to help cover our costs via PayPal at: https://www.paypal.me/MartinDFA We also can receive bitcoins at: 13zBL1oRib9VJu8Uc9zUGNhxKDBBgUpDN1 Please share this post to help to spread the word about the state of things.... Caveat Emptor! Note: this is NOT financial or property advice!! 🚨BEWARE OF SCAMMERS🚨 As there are accounts impersonating Walk The World in the comments on YouTube, note that our comments will have a distinguishable verified symbol. And remember that we will never message you asking you to give us money or talk to us on other platforms such as WhatsApp or Telegram