Refinancing with existing lenders falls 22.8% as switching dips just 1.1%
Australian mortgage demand fell 14.1% year on year in August 2026, marking a fifth consecutive month of contraction, according to Equifax data released ahead of the Reserve Bank of Australia's 29 September cash rate decision.
New South Wales recorded the sharpest fall of the mainland states Equifax reported, with demand down 15.9%, while Western Australia posted the smallest fall, down 10.4%.
The August result was an improvement on July's 16.4% fall, but Equifax Australia executive general manager Moses Samaha (pictured) said borrowing sentiment remains subdued.
"We may well be at or near rock bottom in terms of this contraction cycle," Samaha said.
He warned another rate rise could push that floor lower.
That risk is close at hand, with all four major banks now expecting the RBA to raise rates at its September meeting after three increases this year took the cash rate to 4.35%.
First-home buyers pull back despite policy changes
First-home buyer applications fell 20% year on year in August. Samaha said recent tax changes intended to level the playing field have yet to deliver the lift in first home buyer demand they were meant to create.
He pointed to the combined drag of falling property values and elevated interest rates, saying "policy incentives alone aren't moving the needle".
Samaha also suggested younger Australians are taking a wait-and-see approach and said he doesn't expect their confidence to return until rate cuts are back in prospect. Equifax's age breakdown shows the steepest declines among the youngest borrowers. Demand fell 21.7% among 18- to 25-year-olds and 18.1% among 26- to 35-year-olds, compared with just 1.7% for borrowers aged 66 and over.
Refinancing splits by lender
Total refinancing demand fell 12% year on year in August, but the result varied sharply depending on where borrowers went.
Refinancing with an existing lender dropped 22.8%. Refinancing with a different lender fell just 1.1%, the smallest decline since that measure turned negative in April.
