Master Builders media release: Residential lending falls as industry warns of investment strike

14 August 2026

May’s Federal Budget has triggered a sharp decline in home lending volumes according to figures released today by the ABS.

According to the June 2026 quarter data:

• There was a 6.4 per cent drop in the number of loans used to acquire homes. This was driven by an 11.4 per cent fall in the number of loans to housing investors.
• There was also a 2.9 per cent reduction in loans taken out by owner occupiers to purchase homes.

Master Builders Australia Chief Economist Shane Garrett emphasised that these figures probably mask the true extent of the housing market disruption caused by May’s Federal Budget. This is because the figures relate to the entire three months from early April to late June – some of which was before the budget.

“Even so, today’s figures show that drastic changes are underway in our housing market – especially amongst investors,” said Mr Garrett.

“The fall in lending suggests investors and prospective home builders are becoming more cautious at a time when the industry needs greater confidence and investment to meet our Housing Accord targets. Additional costs and uncertainty created by other Budget changes including to trust arrangements risk further dampening investment activity.”

Master Builders Australia CEO Denita Wawn said that the Federal Government’s policy settings are resulting in fewer homes and construction jobs.

“If we want more homes, roads, schools and essential infrastructure, we need to back the small construction businesses that build them. Australia can’t afford an investment strike in the residential sector.

“That means encouraging investment in the sector. The trust changes currently proposed by the Federal Government should be amended to mitigate the impact on current small businesses through a carve out or grandfathering. The industry also needs policies such as accelerated depreciation and increases to the Instant Asset Write-Off implemented.

“Before even considering the last-minute change to SMSFs and the impact of the trust changes, independent modelling on the impact of May’s Federal Budget shows us that net new housing supply will fall by 8700, rents will rise $9 a week, and 3,800 construction jobs will be lost over the next four years.

“The tax increase on trusts and the associated costly restructure fees, as well as the ban on SMSF investment in housing, will make this picture even worse. Those policies need to be amended to increase housing supply and construction activity.”

Media contact: Dylan Hafey, Adviser, Media & Government Relations

0497 330 064 | dylan.hafey@masterbuilders.com.au