First home11 min read
First-home buyer demand fell 20.1% in August 2026 — what to do before Tuesday’s RBA decision
Equifax’s August 2026 Consumer Market Pulse shows first-home buyer mortgage applications down 20.1% on a year earlier, the steepest fall since 2022. Overall mortgage demand is down 14.1%. Switching to another lender is almost flat. Here is the state table, what the numbers do not say, and a checklist before 2:30pm on 29 September.
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First-home buyer mortgage applications in Australia fell 20.1% in the year to August 2026. That is Equifax’s figure, from the August 2026 Consumer Market Pulse, and it is the largest year-on-year pullback in that series since 2022. Overall mortgage demand fell 14.1%. The average first-home loan size is still about $740,000.
The cash rate is still 4.35% until 2:30pm AEST on Tuesday 29 September. Public commentary has lined up behind a rise. The Board has not voted in public yet. This page is the demand story. The decision-day checklist for an existing loan sits on the 29 September hold-or-hike playbook.
Azure Home Loans provides credit assistance through Bishnu Adhikari (ACR 538895, authorised under 390261 — Yellow Brick Road). General information only. Approval is never guaranteed.
What Equifax counted
The pulse is application demand, not ABS settled loans and not a house-price index. A fall in applications can lead settlements. It can also mean people enquired and then waited. Do not read −20.1% as “prices fell 20%” or “one in five first-home buyers has left forever.”
Equifax’s own summary, August 2026:
| Measure | Year-on-year change | What it is |
|---|---|---|
| First-home buyer mortgage applications | −20.1% | Largest annual fall in the series since 2022 |
| All mortgage demand | −14.1% | Fifth straight month of decline |
| Refinance with a different lender | −0.8% | Nearly flat |
| Refinance with the same lender | −23% | Sharp drop |
| Borrowers with two or more mortgages | −11.4% | Equifax’s investor-style cut; eased from −15.1% in July |
| Credit cards | +2.9% | Back to growth after four down months |
| Personal loans | +1.3% | Back to growth |
The path into that −20.1% was a slide, not a one-month shock. Equifax’s national first-home series went −13.4% in May, −17.2% in June, −19.2% in July, then −20.1% in August.
Overall mortgage demand was −10% in May and about −14% in June, then −14.1% in August. Slightly less bad than July’s broader contraction in some retellings, and still a fifth consecutive down month. Equifax described households as hesitant about large new long-term commitments.
Younger applicants led the mortgage pullback: −21.7% among 18–25 year-olds and −18.1% among 26–35 year-olds. Loan size did not shrink with them. Equifax put the average first-home buyer loan at about $740,000 nationally, about $622,000 for 18–25 year-olds and about $734,000 for 26–35 year-olds, and called those sizes all-time highs in this release.
First-home applications by state
Equifax’s first-home buyer table, year-on-year, August 2026:
| State | First-home buyer demand |
|---|---|
| Queensland | −22.6% |
| New South Wales | −22.0% |
| Western Australia | −18.4% |
| Victoria | −18.2% |
| South Australia | −15.9% |
| Australia | −20.1% |
Queensland and New South Wales did the most of the damage. No mainland state in that table was close to flat.
Overall mortgage demand, which includes more than first-home buyers, was down in every jurisdiction Equifax listed: ACT −17.6%, NSW −15.9%, Queensland −14.7%, South Australia −13.7%, Victoria −12.8%, Western Australia about −10.4%.
If you are buying in Brisbane or Sydney, “the national average” is the kinder number. Your corridor is the worse one.
State guides for scheme and duty rules, which this demand table does not replace: NSW · Victoria · Queensland · Western Australia.
The split that actually changes a broker’s week
New first-home applications collapsed. Switching lender did not.
Refinance with a different lender was −0.8% year on year. Refinance with the same lender was −23%. People are not flooding back to their current bank’s retention desk. They are still willing to look elsewhere, in about the same volume as a year ago.
That split is not even across the map. Switching to a different lender rose in Western Australia (+2.3%) and Queensland (+1%) and fell in the ACT (−12.7%) and South Australia (−7%). Older owners did the switching: +13.3% for ages 56–60 and +9.2% for 60 and over. Same-lender refinance fell hardest in NSW (−28.3%) and among 36–45 year-olds (−25.6%).
Two practical readings, both short of a recommendation:
- If you already have a loan, a quiet application market does not mean your lender will volunteer a sharper rate. The people getting movement are the ones comparing a different lender, on the remaining term, after fees. Start with refinancing and the loyalty tax piece, not with a guess about Tuesday.
- If you are buying a first home, you are in the part of the market that actually stepped back. Less competition at an auction is not the same thing as an easier credit assessment.
The March-quarter ABS story — new lending down, refinance in its own tables — is still the official settlements view. It is older than this pulse. Read it as background: mortgage market split, ABS and Equifax Q1.
Tuesday is a separate fact
Demand fell while the cash rate was already 4.35%. Another move, if it comes, lands on top of that.
On 28 September, ABC News reported markets pricing a hike at about 90%, and all 29 economists in a Bloomberg survey — including CBA, Westpac, NAB and ANZ — tipping 4.60%. ANZ was also tipping November. ABC, citing Canstar, illustrated a full 0.25 percentage point pass-through at about $91 a month extra on a $600,000 loan and $114 a month on $750,000, and a borrowing-capacity cut of more than $47,000 for one person on an average full-time wage of $108,650, or nearly $95,000 for a couple both on that wage. Those Canstar figures are ABC’s report of Canstar’s model. They are not an Azure assessment and not your repayment.
I am not calling the vote. A survey can be wrong at 2:30pm. What you can do before then does not require the result:
- Treat any pre-approval as dated. Ask whether the assessed rate still matches the lender’s sheet.
- Run your own numbers in the borrowing power calculator and the repayment calculator. Add 0.25 percentage points yourself. The tool is an estimate, not an approval.
- If the deposit is under 20%, price before you assume a softer auction makes the purchase cheaper. Premiums follow , not Equifax’s application count.
- Do not exchange because you think Tuesday afternoon will “settle the market.” August CPI is due at 11:30am on Wednesday 30 September, after the vote. The sequence is in the 29 September playbook.
Housing Australia’s First Home Guarantee is an eligibility and price-cap question. Equifax did not say the scheme caused the $740,000 average. A smaller number of still-large loans is what the pulse shows. Confirm caps and places on the official scheme page before you rely on a 5% deposit path.
What I would actually do with a file this week
If you are a first-home buyer with a property in sight
Bring the contract price, the deposit split (cash versus family), stamp duty, and any HECS or card limits. The question is whether the loan still services at your rate and at your rate plus 0.25%, on the term you intend to keep. A nationwide drop in applications does not approve you, and it does not decline you.
If you are waiting for prices to fall further
Cotality’s August index was already a fifth monthly decline. That piece is the September property downturn playbook. Waiting can be rational. It can also mean the borrowing test tightens while you save. Write down the repayment you can live with. If the listing still clears that number after a 0.25% stress, the wait is a preference. If it does not, the wait is the assessment.
If you already own and the letter you want is a rate review
You are closer to the −0.8% “different lender” line than to the first-home line. Get the current lender’s offer in writing. Compare it term-for-term. A cheaper monthly number on a fresh 30-year term can cost more interest. Use the refinance calculator.
If you are 18–35 and the enquiry was a “maybe”
Your age band is where demand fell hardest. Lenders will still read the file they are given: income, conduct on statements, and the deposit. A quiet market does not relax serviceability. It does mean you are less likely to be one of ten offers on a Saturday.
Worked illustration, not a quote
Assumptions, labelled so you can throw them out:
- Loan $740,000 — Equifax’s national average first-home size in the August pulse, not your approval.
- Illustrative owner-occupier variable rate 6.40%. I picked a round figure inside the range public rate round-ups have been quoting for owner-occupiers. It is not a product.
- Principal and interest, 30 years, no offset, no fees.
Rough scheduled repayment at 6.40% is in the order of $4,630 a month. At 6.65% (that rate plus 0.25 percentage points, if a lender passed a cash-rate move through in full) the figure is in the order of $4,750 a month. Difference about $120 a month, before fees and before whatever rate you are actually on.
Change the rate or the term and the dollar moves. Put your numbers in the repayment calculator. If the deposit is thin, run LMI as well. Neither tool is a credit decision.
FAQ
Did first-home buyer demand really fall 20% in August 2026?
Equifax’s August 2026 Consumer Market Pulse shows first-home buyer mortgage applications down 20.1% on August 2025. That is application demand, not ABS loan settlements and not a price index.
Are first-home buyers borrowing less?
The count of applications fell. The average size did not. Equifax put the national average first-home loan at about $740,000, still described as an all-time high in that release.
Does a fall in demand make it easier to get a home loan?
It can mean fewer competing buyers. It does not change the lender’s serviceability test, the deposit, or LMI. Assessment is the file in front of them. Approval is not guaranteed because the national series is down.
Should I wait until after the 29 September RBA decision to apply?
Waiting for a headline does not improve a file, and a hike — if it happens — can tighten the test you are waiting on. If you are close to exchange, confirm the pre-approval and the +0.25% path first. The rate call itself is on the 29 September playbook.
Is refinancing dead if mortgage demand is down 14%?
No. In the same Equifax release, refinance to a different lender was −0.8%, while refinance with the same lender was −23%. Shopping is not the same series as first-home applications.
Sources
Accessed 28 September 2026.
- Equifax Australia — Consumer Market Pulse, August 2026 (PDF). Application figures, state table, age bands, loan sizes, refinance split. The PDF footer still says “current as of June 2026”; the report title and tables are August 2026. Figures above are taken from the August tables, not from the footer.
- Reserve Bank of Australia — cash rate target. Target 4.35% effective 12 August 2026; next update 2:30pm, 29 September 2026.
- ABC News, 28 September 2026 — Interest rates likely to rise tomorrow. Bloomberg economist survey, major-bank calls, Canstar repayment and borrowing-capacity illustrations. Reported as ABC’s account, not re-calculated here.
General information only — not personal credit, tax, or financial-product advice. Application statistics are not a prediction of your approval, your rate, or the Reserve Bank’s vote. Azure Home Loans — ACR 538895, authorised under ACL 390261 (Yellow Brick Road).
Next step: Speak to a broker · First home buyers · Apply pathway
Related guides
Azure Home Loans — general information only, not personal credit advice.
Pre-approval to settlement
Pre-approval is not final approval
Checklist from conditional pre-approval through unconditional finance and settlement — the late-stage risks that break contracts.
Continue on this topic
Selected internal links curated for crawlers + readers tracing the same journey — calculators, glossary, service FAQs, hubs.
- First home buyer guide
Links FHBG-era explainers with calculators + glossary scaffolding.
- FHBG-ready service lane
Policy notes, timelines, FAQs — aligns with concession programs.
- Mortgage repayment page
Principal & interest instalment estimates before enquiry.
Next step
When you want the same themes applied to your file — lender policy, documentation, and structure — Speak to a broker, browse mortgage broker services, or start the apply pathway. Bishnu Adhikari will reply with a sensible next move.