Mortgage applications have fallen, particularly among first-time homebuyers and young people, as the property market continues to soften.

Mortgage applications were down 14.1 per cent in August, compared to August 2025, according to consumer credit reporting agency Equifax.

Applications fell 21.7 per cent among 18- to 25-year-olds and 18.1 per cent among 26- to 35-year-olds, Equifax said.

Mortgage applications from first-time homebuyers were down 20.1 per cent, the largest year-on-year decline that Equifax has recorded among first-time homebuyers since 2022.

“Younger Australians continue to be the most impacted amid current market conditions and cost of living constraints,” said Kevin James, chief solution officer at Equifax.

Equifax’s data measures applications that go through the Equifax Consumer Credit Bureau by financial services credit providers in Australia.

All of Australia’s big four banks in August also reported double-digit declines in mortgage applications.

Commonwealth Bank, the nation’s biggest lender, said on August 12 that home loan applications were down 15 per cent since May, compared to a year ago.

Sweeping changes to Australia’s property tax rules announced in May, along with three interest rate hikes in February, March and May, have been blamed for the decline in property values.

August was the fifth straight month where mortgage demand was down compared to 2025, Equifax said.

Applications were down 10 per cent in May, 14 per cent in June and 16.4 per cent in July, Equifax said.

“It is positive in some respects to see it has not continued its downward trajectory from the past few months and has softened slightly,” James said.

“However, consumers still appear to be apprehensive.”

Households appeared to be actively re-evaluating their commitments and choosing to hold off on taking on massive new capital obligations while using short-term and unsecured credit to maintain household flexibility, he said.

Equifax said credit card demand returned to growth in August, with applications up 2.9 per cent compared to August 2025, although this growth was driven mostly by older Australians.

According to figures from property research group Cotality, national home prices have declined for five straight months since hitting a peak in March, dropping a total of 3.6 per cent since then.

William Buck chief economist Besa Deda predicted earlier in September that national dwelling prices would fall a total of five per cent in 2026 and another one per cent in 2027.

Sydney and Melbourne were likely to record the largest declines, at 11 per cent and 10 per cent, respectively, Deda forecast.

-AAP