How did the lending market open 2026?

Just over 34,680 new loans were written across all buyer types in Q1 2026. That is a pullback from Q4 2025, when activity peaked at a near decade high, but it still represents the strongest Q1 result since 2022. The market is softer than its recent peak, but it has not fallen away sharply.

What is behind the record investor lending results? 

Investor lending was the clear standout. With 12,660 new investor loans written in Q1 2026, up 29% on Q1 2025, this is the highest Q1 investor lending figure on record. The result likely reflects investors moving ahead of the federal budget changes, locking in positions before negative gearing and CGT concessions on established dwellings were removed.

Are upgrader buyers still active in the market? 

Subsequent owner occupier lending also grew in Q1 2026, with 13,540 new loans written, up 7% on Q1 2025. While still below the HomeBuilder supported peaks of Q1 2021 and Q1 2023, which each saw around 17,000 new loans written, activity in the upgrader segment remains solid. Buyers are still trading up, though in smaller numbers than during the stimulus driven peaks.

Is the 5% Deposit Scheme still holding first home buyers in the market? 

First home buyer lending edged marginally higher year on year, with 8,480 new loans written in Q1 2026, above the Q1 decade average of 8,100. Government support through the 5% Deposit Scheme continues to underpin demand despite tightening affordability and rate rises.

However, with FHB activity essentially flat while other segments grew, their share of the total lending market has fallen to just 24%, the lowest since 2017.

How will rate rises and Budget changes shape lending in Q2 2026?

New loan commencements are expected to fall materially from here. The Q1 investor record largely reflects buyers moving ahead of budget changes rather than a fundamental shift in market confidence, and that effect is now largely spent.

Investor activity is likely to pull back as rate rises flow through and new tax settings lock in. The removal of negative gearing and CGT concessions on established dwellings reduces the viability of shorter term investment strategies, which had been a meaningful driver of the Q1 result.

Want the Full Picture?

This article draws on findings from RPM Group’s VIC Metro Market Intelligence Report – Q1 2026. Access the complete data and market forecasts in the full report.