Labor’s tax reforms have triggered an unprecedented spend by investors looking to build their wealth through a new home.
New data from the Australian Bureau of Statistics shows investor loans for new construction dwellings is at an all-time high in South Australia, with 649 approvals granted in the past quarter.
This beats last month’s 621 – the previous high – by almost 30.
The total value of these loans is a staggering $425.4m – again, another record, eclipsing the previous quarter’s record of $391.4m by a whopping $34m.
The average loan size for investors building a new dwelling was $655,469.95 – you guessed it, another record high.
Conversely loans approved to investors buying a newly erected home are at their lowest point since their record high in the September 2025 quarter at 82, and with a total value of all loans approved of $55,400,000.
In that quarter, the 82 loans approved amounted to $85.6m.
All in all, for this quarter, investor loans tipped $2.4176bn into the sector.
Edge Realty director Mike Lao says the new tax reforms and recent value drops have zapped first homebuyer confidence. Picture: Kelly Barnes
Edge Realty director Mike Lao said the tax reforms, and the impact they had had on house prices had pushed first homebuyers out of the market, and where they were in, had further pitted investors against first homebuyers, with first homebuyers often losing out to more cashed-up buyers.
“A lot of first homebuyers are holding off because they’re worried about prices dipping further,” he said.
“The banks have tightened up their lending criteria for first homebuyers and they are generally getting pipped by investors.
“The new build market is healthy, it’s just buyers can borrow less and that’s slowing thing.
Mr Lao said the tax reform changes had been seen a negative thing for the market.
“People have lost confidence and first homebuyers are worried they’re going to be in negative equity and they are holding off, so there are less transactions, and that could be reflected in that data.
“They’re being super cautious.”
Separate Loan Market data showed SA had recorded a 24 per cent drop in investor loan applications when comparing March 2026 to July 2026.
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Loan Market chief executive and executive chairman Sam White.
Loan Market chief executive and executive chairman Sam White said Loan Market applications data shows that the share of investors out of all their loans for new builds had peaked in May or June, which was likely a reflection of other buyers pulling back in response to rate cuts and investors being more resilient in that space – even as they pulled back from established loans.
Across the country, Loan Market recorded a 24 per cent drop in wider investor loan applications.
“Based on the budget, some of the investors are continuing and they want the tax benefits (from building new),” Mr White said.
“But what we have seen since the budget has been a lot of people saying they would like to wait.”
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With expectations home values were falling, and with signs fewer homes were being started, he noted it was plausible building costs could stall or even drop as builders became more competitive – which had led to first-home buyers pulling back a little, making investors who persevered stand out a little more.
Olga Ramos and her husband Louie are property investors who prefer buying off-the-plan. Picture: Tim Hunter.
Investor Olga Ramos recently bought an investment property off-the-plan and said buying new gave them flexibility under current tax settings.
“We’ve really preferred off-the-plan … it lets us stay liquid while still positioning for future growth, rather than tying up all our capital upfront on an established property.”
– with Nathan Mawby and Aidan Devine
