Equifax figures show new market entrants are already pulling back. New mortgage demand slowed sharply from a robust 10.9% year-on-year rise in the fourth quarter of 2025 to just 3.6% in the first quarter of 2026.
Month-by-month data underscores the trend: Growth dropped from 7.1% year on year in January to 3.9% in February, before stalling at -0.2% in March.
“In this period of intense economic headwinds, Australians are focusing on managing existing debt rather than taking on new obligations,” Samaha said.
Victoria is leading the downturn. The state finished 2025 in positive territory at 5.1% year-on-year growth in new mortgage demand in the fourth quarter, but the tide turned quickly in 2026. Activity eased to 2% in January, fell to -3.2% in February and slumped to -7.9% in March.
“If the RBA proceeds with another hike to combat the 4.6% inflation rate, we could see this cooling effect broaden across other states,” Samaha said.