Australian home prices are projected to bottom out between the June quarter 2027 and the June quarter 2028, most likely around the September quarter of 2027.
The national housing downturn deepened significantly in the September quarter as new mortgage loans dropped by a record 15 per cent. Official figures released by the Australian Bureau of Statistics show that the total value of new housing loans settled fell to $81.2 billion, down $14.9 billion compared to the June quarter.
According to ABS figures released on Wednesday, 11 November 2026, the number of new home loans fell 15.0 per cent to 111,878 in the September quarter 2026.
The sharpest contraction occurred in the investor segment. Bureau figures revealed that new lending to property investors fell 32.3 per cent in the September quarter, marking the largest quarterly decline since records began in 2002.
Over the same period, the number of new investor loans fell 30.6 per cent to 35,301 loans, while their value fell 32.3 per cent to $24.705 million. This represented a sharp reversal from late 2025, when annual growth in the number of new investor loans reached 24.9 per cent before tumbling to -38.5 per cent by the September quarter of 2026.
Owner-occupier first home buyer loans accounted for 23.6 per cent of all new lending in the September quarter, marking the highest proportion since December 2023.
“Our data suggests that investor activity is being influenced by factors beyond increasing borrowing costs, including the potential impacts of tax changes and expectations of lower house prices,” said Dr Mish Tan, ABS head of finance statistics.
The downturn follows the federal government’s budget overhaul of negative gearing and capital gains tax settings. Treasurer Jim Chalmers revealed plans to limit negative gearing to new builds and return the capital gains tax concession to an inflation-adjusted basis, coinciding with five Reserve Bank interest rate hikes over the year.
“It’s hard to see how the tax changes, along with five interest rate increases this year, have done anything but decimate confidence in the property market,” said Cameron Kusher, chief economist at Herron Todd White.
Housing Minister Clare O’Neil defended the policy trajectory by pointing to a clear shift away from speculators and toward first-time buyers.
“We’ve had a housing market geared towards investors for a generation, and where did it get us? Plummeting home ownership, out-of-control house price increases, and a generation losing hope,” said O’Neil.
“These numbers show the balance is shifting back towards Australians who are buying a home to live in, and especially to our first home buyers,” she added.
Major financial institutions have downgraded their national home price trajectories following the latest interest rate and lending data. The Commonwealth Bank is now tipping a peak-to-trough fall of about 14 per cent, with the market expected to bottom out in mid- to late-2027.
ANZ has projected a cumulative fall of 7 to 14 per cent and anticipates stabilization in late 2027 as the Reserve Bank begins easing rates. Westpac forecasts a total 10 per cent drop across the downturn, while the National Australia Bank predicts a fall of about 7 per cent.
Analysis of historical market cycles by Money.com.au and Primara Research indicates that home values typically reach their lowest point in a falling cycle roughly one year after three consecutive quarters of contracting lending activity.
Earlier coverage: Australian variable home loan holders face an immediate cash squeeze as major lenders pass on a
