First homebuyer mortgage applications plunge 20% as new home sales fall

In August 2026, Australia saw a sharp decline in first homebuyer mortgage applications, falling 20.1% annually, the worst since 2022. New home sales also dropped 10% in August, with a quarterly plunge of 19.3%. These declines are attributed to recent interest rate hikes and federal Budget changes to negative gearing and capital gains tax. Meanwhile, national rents increased by 7.3% in the year to September, outpacing inflation, adding pressure on renters. The housing market downturn is expected to reduce home construction in 2027.