- South Australia (SA) home loan lodgements fell 25% since January as interest rate increases weigh on buyer borrowing power.
- Owner-occupier upgraders in SA saw the steepest drop nationwide, falling 25%, while investor lodgements fell 39%.
- Refinancing surged to 57% of total lodgements as homeowners look for breathing room in household budgets.
With September marking the fourth Reserve Bank of Australia (RBA) rate hike this year, the property market is slowing down as buyers and sellers navigate growing uncertainty.
According to Loan Market’s October loan trends report, home loan lodgements (excluding refinancers) in South Australia (SA) have dropped 25% since January, before the rate-hike cycle began – slightly above the national average fall of 24%.
“As property prices adjust and interest rates climb, buyers are naturally taking a more cautious approach,” Loan Market credit expert Shay Waraker said.
“Higher rates directly reduce how much buyers can borrow, so many are choosing to wait and see if prices drop further before taking the plunge.”
Investors and upgraders lead the slowdown in SA
While activity has softened across all buyer types, investors and owner-occupier upgraders have pulled back significantly.
Along with four rate rises, investors are feeling the squeeze from federal budget changes to capital gains tax and negative gearing. Since January, investor loan lodgements in SA have fallen 39% – below the national average decline of 44%.
Across Australia, investor lodgements for existing properties have dropped 56% since before the rate-hike cycle began in late January. New property lodgements have also fallen, though by a smaller 10%.
In SA, first home buyer loan lodgements have dropped 10%, while lodgements for owner-occupier upgraders have fallen 25% – the largest drop of any state.
Homeowners turn to refinancing for relief
At the same time, the rate-hike cycle experienced so far in 2026 is motivating more homeowners to review their current loans and refinance.
“When rates rise, we consistently notice two trends: fewer new loan applications and a sharp increase in refinancing,” Ms Waraker said.
“Higher interest rates prompt mortgage holders to look closely at their current loan – whether to secure a lower rate p.a. or make changes to free up cash flow. It is a good idea to consider exploring options to find the right loan for your needs.”
“In this current climate, many homeowners are simply looking for some wiggle room in their household budgets.”
Driven by this trend, refinancing reached a record high of 57% of all Loan Market Group lodgements in September, as brokers searched for a better deal for customers in a rising rate environment.
