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Mortgage demand drop opens door for investors
With market activity slowing and mortgage demand decreasing nationally, an opportunity to act has presented itself for investors ready to transact in what is shaping to be a buyer’s market.
According to Equifax’s Consumer Market Pulse June 2026, overall mortgage demand has declined by 14 per cent when compared to 12 months ago, as buyers adjust to the new economic conditions.
The data found that the ACT experienced the largest decline, falling by 18.6 per cent.
NSW and Victoria both experienced more significant declines in mortgage demand, dropping by 15 per cent and 15.9 per cent respectively.
The report found no positive mortgage growth in June in any state or age group, with Western Australia the most resilient state, with overall demand declining by 8.5 per cent.
Equifax said that sustained economic pressures appeared to be forcing consumers to reprioritise their spending and borrowing habits.
“The Equifax Consumer Market Pulse June data indicates that the proactive risk management we observed among Australian households earlier this year has evolved into a far more conservative, defensive approach to borrowing,” Equifax chief solutions officer Kevin James said.
“Facing a cumulative double whammy of persistent cost-of-living constraints and a sustained high interest rate environment, households appear to be responsibly choosing to preserve liquidity and actively curb their exposure to new debt commitments.”
Despite the overall decrease in mortgage demand nationally, industry experts said that the drop in competition had opened the door for investors who had the risk appetite to act when others hesitated.
While the total number of active buyers on the market had declined, it had created a buyer’s market, offering the opportunity for some investors to even secure property at a discounted rate.
The report said that the drop in mortgage demand was not limited to new loans, with refinancing decreasing by 10.4 per cent with the same lender, and 15.1 per cent with a different lender.
The outlook was even worse for the first home buyer market, which recorded a drop of more than 17 per cent, despite several measures designed to bolster the demographic’s ability to enter the market.
With a decrease of more than 20 per cent, Queensland first home buyers were most impacted by the change in mortgage demand, closely followed by Victoria with an 18.2 per cent drop.
Conversely, Tasmania’s first home buyer market was the most stable amongst the states, despite demand falling by 9.9 per cent.
According to Equifax’s data, the younger demographics were driving the downturn in mortgage demand, with 26-35-year-olds recording the sharpest decrease of 18.2 per cent.
The youngest demographic, 18–25-year-olds, recorded the second-largest fall, with a drop of 19.9 per cent, while those 56+ declined the least, with just 5.6 per cent.
James said that the shift in consumer lending habits was not restricted to “big ticket” interest-rate-sensitive assets like mortgages.
“In this current environment we’ve also observed a visible generational divide within the credit landscape, particularly with under-35s who are pulling back hard right across the credit spectrum,” James said.
“This retreat stands out clearest in new mortgage applications, where demand from the 26-35 age group effectively hit a wall, dropping -20.5 per cent.”
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