ABS data also show record volumes for investors and refinancers in December quarter
First-home buyer activity accelerated sharply in the December 2025 quarter following the expansion of the federal Home Guarantee Scheme, with the value of new loans to this segment up 15.5% over the three months.
According to the latest Australian Bureau of Statistics (ABS) Lending Indicators, the value of loans to first-home buyers reached $19.3 billion in the December quarter, the second-highest quarterly total on record and exceeded only by March 2021. The number of first-home buyer loans rose 6.8% on the previous quarter.
While this represents the strongest level of participation since March 2022, it remains well below the June 2009 high of 49,499 loans, recorded during the Rudd government’s enhanced first-home owner grants.
Across the states and territories, New South Wales recorded the largest quarterly rise in first-home buyer lending, followed by Western Australia and the ACT.
Broader housing credit was also strong. Total new mortgage commitments reached $108 billion in the final quarter of 2025, a record high. Investor activity increased alongside owner‑occupier demand, with the value of investor lending up 7.9% to $43 billion, also a record for that segment.
Average loan sizes continued to climb. The ABS data show the average new owner‑occupier loan reached a fresh high of $736,000 in the December quarter, up $42,000 in three months. The increase coincided with three Reserve Bank of Australia cash rate cuts during 2025, which boosted borrowing capacity. On a rough measure, that equates to an increase of about $457 in average loan size each day over the quarter.
New South Wales recorded the largest average new owner‑occupier loan at $873,000, a new peak for the state after a $44,000 rise over the three‑month period. Western Australia posted the strongest growth in both dollar and percentage terms, with its average owner‑occupier loan size climbing $55,000, or 9%, to $688,000. All figures are reported in original terms and rounded to the nearest $1,000.
Refinancing remained elevated despite a slight fall in volumes. The number of loans switching to a different lender declined by 0.4% over the quarter, but an average of almost 35,000 mortgages still changed lenders each month in October, November and December. The combination of high switching levels and larger average debts pushed the total value of external refinancing to a record of more than $68 billion in the December quarter.
“The expansion of the Home Guarantee scheme has fired up the first-home buyer market, with thousands more securing a foot on the property ladder in the space of three months,” said Sally Tindall (pictured right), data insights director at Canstar.com.au.
“However, a surge in buyers, a rise in borrowing power, thanks to the three cash rate cuts in 2025, and a government proactively encouraging Australians to borrow with as little as 5% deposit, can only mean higher prices and more debt.
“While the federal scheme makes it easier for many first home buyers to get on the ladder with a small deposit, it certainly doesn’t mean the commitment and responsibility of repayments is any easier, particularly now we’ve had a U-turn back to interest rate hikes.
Tindall, however, noted that refinancing activity still remains elevated, with a record $68 billion worth of loans switching to a different lender in the last quarter of 2025.
“While RBA cuts often push people to check their rates and consider refinancing, RBA hikes are usually an even bigger motivator,” she said. “This latest increase should encourage greater switching and a corresponding step up in competition in the market.”
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