Investors drive new builds, ABS data reveals
Home renovation lending in Australia has reached near-record levels, supported by rising property values and low unemployment, according to the latest figures from the Australian Bureau of Statistics (ABS) for the September quarter 2025.
The ABS Lending Indicators show that the value of loans for renovations is now almost triple what it was before the pandemic. This increase has been attributed to higher house prices and a robust labour market.
Many households are opting to renovate rather than move, seeking extra space as land prices remain high. Renovation activity is now expanding at twice the pace of the broader economy.
Investor participation in new housing supply has also increased. In the September quarter, investors accounted for 43% of new home construction. This proportion is above the long-term average.
“Investors play a vital role in bringing new homes to market,” said Tim Reardon (pictured right), chief economist at the Housing Industry Association. “Since the 2019 election, the ABS has been reporting on the importance of investors to increasing the supply of new homes in Australia.
“Investors typically supply around a third of all new homes built in Australia but are a larger share of the market at present due to a lower level of activity from owner occupiers.”
The ABS also reported a continued rise in permanent and long-term arrivals to Australia, suggesting that housing demand will remain elevated.
Reardon, meanwhile, cautioned against increasing taxes on property investors, arguing that such measures do not boost new housing supply.
He emphasised the need for policies that ensure a steady supply of development-ready land and reduce costs for those building new homes. “This includes policies that reduce the tax imposts on those that build new homes and reduce the regulatory burden on the industry,” Reardon said.
Nationally, the number of loans for purchasing and constructing new homes fell by 0.2% in the September quarter compared to the previous quarter.
Tasmania recorded the largest increase in new home loans (+18.2%), followed by New South Wales (+12.3%), the Australian Capital Territory (+8.5%) and Victoria (+0.3%). Declines were observed in Queensland (-0.4%), Western Australia (-3.0%), South Australia (-3.9%) and the Northern Territory (-26.8%).
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
