Australian Mortgage Demand Drops 14.1 Percent in August

Australian mortgage demand fell 14.1 percent year-on-year in August 2026, marking the fifth consecutive monthly decline. Equifax reports that first home buyers experienced the sharpest retreat, with demand plunging 20.1 percent nationally, the steepest annual fall since 2022. This downturn was most pronounced in Queensland and New South Wales, where first home buyer demand dropped by more than 22 percent.

The contraction persists despite the Parliament of Australia expanding a 5 percent deposit scheme in October 2025. The average first home buyer mortgage remains at a record high of $740,000. While overall demand is contracting due to sustained high interest rates and cost-of-living pressures, Western Australia emerged as the most resilient market with the smallest overall demand decrease at 10.43 percent.

Refinancing activity shows a split trend. External refinancing has stabilized, particularly among borrowers aged 56 and over, while internal refinancing with the same lender dropped 23 percent nationally. Kevin James, Chief Solutions Officer at Equifax, noted that younger Australians remain the most impacted by current market conditions and cost-of-living constraints.