New ABS Lending Indicators data for the December quarter 2025 has exposed the growing cost of Labor’s housing failure, with average home loan sizes recording their largest increase in more than a decade.
Instead of delivering affordable homes, the Albanese Labor Government has delivered record debt.
The ABS figures show that while the number of first home buyer loans increased across most jurisdictions — led by New South Wales (+10.9 per cent) and Western Australia (+9.8 per cent) — the value of those loans is rising far faster, with the average loan in WA increasing by $55,000 in the December quarter to $688,000, reflecting the relentless surge in house prices.
In Western Australia alone, the value of finance for new home buyers jumped from $1,864.8 million to $2,211.1 million in the December quarter — a staggering increase in just three months.
WA also recorded the largest annual increase in average loan size for owner-occupiers, up 16 per cent to June 2025 — the highest in the nation.
At the same time, property investment lending in WA has surged more than 400 per cent over the past five years, fuelled by soaring rents and escalating property prices.
Investment lending rose another 9.1 per cent in the September quarter 2025 alone.
Mean dwelling prices in WA climbed 4.5 per cent ($40,800) in the September quarter, among the strongest increases in the country.
These figures confirm a simple truth: under Labor, Australians are not buying more affordable homes — they are taking on bigger mortgages to chase fewer properties.
While first home buyers may be entering the market in slightly higher numbers, they are doing so with unprecedented levels of debt.
This is the direct consequence of a Federal Government that has failed to match population growth with housing supply, failed to meet its National Housing Accord targets, and failed to control the inflationary pressures that are driving up construction and land costs.
Labor will point to rising loan approvals as a sign of confidence.
In reality, it is a sign of desperation — young Australians stretching further than ever before just to secure a foothold in an overheated market.
When average loan sizes rise at the fastest pace in more than a decade, it does not signal affordability – it signals a housing system under strain.
COMMENTS ATTRIBUTABLE TO SENATOR DEAN SMITH:
“Labor’s housing policy is forcing Australians to take on record levels of debt just to buy a home.”
“The largest increase in average loan sizes in more than a decade is not a success story — it is proof housing affordability is going backwards.”
“In Western Australia, the value of new home buyer lending has jumped by more than $346 million in a single quarter. That is not opportunity — that is escalating risk.”
“WA has seen the largest annual increase in average loan sizes in the nation and a 408 per cent surge in investor lending over five years. That tells you everything about who this market is working for — and it is not first home buyers.”
“Unless Labor fixes supply, reins in inflation and restores confidence in the construction sector, young Australians will keep paying more and borrowing more for less.”