AFG Lodgements Slide to $28.1bn as Investors Pause: What the June-Quarter Dip Means for Brokers

Australia’s largest mortgage aggregator just posted its softest quarter in a while — and every broker should read the fine print. AFG lodged $28.1 billion in home loans in the June 2026 quarter, down from $29.5 billion three months earlier, as investors hit pause after the May budget scrapped negative gearing on existing properties and three rate hikes chewed into borrowing power. The aggregator and brokers on the ground insist it’s a readjustment, not a retreat. Here’s what the numbers actually say — and how to work them.

The Numbers: A $1.4 Billion Step Back

Against a backdrop of higher rates, a reshaped tax landscape and continued global uncertainty, the ASX-listed AFG lodged 38,583 home loans worth $28.1 billion in the June quarter. That’s down from 40,784 loans worth $29.5 billion in the March quarter — a fall of roughly 5% by number and about $1.4 billion, or 4.7%, by value.

It’s a step back, but it’s worth keeping perspective. The average loan size actually rose, ticking up past $727,000 from $724,000 the quarter before. Fewer deals, but bigger ones — a signal that the borrowers who are transacting skew toward established owners and upgraders rather than first-timers stretching to get in.

AFG chief executive David Bailey framed the quarter as expected, not alarming. “Some easing in June was expected, especially after the federal budget announcement on 12 May and during a tightening rate cycle,” he said. Crucially, he added: “We believe the fiscal policy changes announced during the quarter will represent a period of readjustment rather than a structural shift in underlying demand.”

Why the Pipeline Cooled: Budget, Negative Gearing and Three Rate Hikes

Two forces collided in the June quarter, and brokers felt both.

The budget shock

The 2026–27 federal budget, handed down on 12 May, removed negative gearing tax breaks on existing properties for investors. Whatever your view on the policy, the immediate effect was uncertainty — and uncertainty is kryptonite for finance decisions. Investors in particular hit the brakes, choosing a wait-and-see stance while they worked out what the change meant for their numbers.

The rate squeeze

Layered on top were three consecutive RBA rate hikes across 2026, lifting the cash rate to 4.35%. Higher rates trimmed borrowing capacity at exactly the moment cost-of-living pressure was already squeezing household budgets. The result, for many brokers, was a pipeline full of enquiries that refused to convert: clients reviewing capacity, weighing options, asking questions — but few pulling the trigger.

The Investor Pullback: 34% and Falling

The clearest fingerprint in the data is the investor retreat. Investors slipped to 34% of AFG’s portfolio for the quarter, down from 35% — and in the month of June alone, they made up just 32%. On AFG’s reported shares, that’s roughly $9.5 billion of investor lending, down from about $10.3 billion in the March quarter.

Every other segment held firm or improved. First-home buyers stayed steady at 12%. Refinancers nudged up to 16% from 15%. Upgraders — the engine of the quarter — lifted to 44% from 43%. Bailey called the soft investor month “unsurprisingly” soft: “We have seen patchy investor volumes as the market absorbs the new settings, and the data is consistent with some borrowers pausing or reassessing plans.” He described the phase as “transitional,” adding that “broker demand has remained resilient.”

Brokers on the Ground: Confusion, Then Recovery

Aggregator data tells you what happened; brokers tell you why — and where it’s heading. The word that keeps coming up is confusion, followed quickly by recovery.

“The momentum will definitely continue,” Perth-based Claire Viskovich, founder and director of Beez Neez Finance, told Australian Broker. “There was a lot of confusion around the negative gearing and the tax changes. A lot of clients were confused. Even myself. It took a while to work out exactly what the situation was… But now that the federal budget has passed, we know what’s happening, we know what’s going to happen in the next year.”

Brisbane broker Luke Ashby of Emerge Finance saw the same arc. “There was obviously a lot of doom and gloom in the headlines. The budget combined with the rate rises recently, it just took a lot of the confidence out of the market. But now I’m seeing clients coming through; inquiries are picking up.” In his own business, Ashby said enquiries were down about 40% year-on-year in May before turning back up in late June and early July.

That’s the tell for brokers reading this: the trough looks like it was May, and the clients who went quiet are the same clients now coming back with questions.

The Quiet Story: Non-Majors Keep Winning Share

Underneath the headline dip is a shift that’s been running for years and shows no sign of stopping: borrowers keep drifting away from the big four. The majors’ share of AFG lodgements fell to 58% in the quarter, down from 60%, while non-majors climbed to 42% from 40%.

Within the majors, Westpac’s brands led with 18% of lodgements, CBA and ANZ brands sat at 16% each, and NAB stayed flat at 8%. Macquarie — technically a major but forever punching in the non-major weight class on service — grabbed 14%.

For brokers, this is the enduring lesson of the quarter: when clients turn cautious, a wide, well-understood lender panel is your edge. The deals that got done didn’t all go to the household names.

State by State: WA and SA Buck the Slide

The cooling wasn’t evenly spread. Lodgements fell across four of the six states — New South Wales, Queensland, South Australia and Victoria — while the Northern Territory and Western Australia bucked the trend with higher volumes.

Zoom out to the full year and the divergence is starker still: lodgements in South Australia were up 7.9% year-on-year, and Western Australia surged 14.6%. “Western Australia’s continued strength, driven by its resource-sector economy and supply-constrained housing market, reinforced its position as a standout contributor to national volumes,” Bailey said. If you write loans in the west, the pipeline isn’t cooling — it’s compounding.

The Rate War Underneath It All

Here’s the twist that makes this quarter an opportunity as much as a warning: even with the RBA on hold and hiking, lenders are cutting. In a single recent week, Canstar counted 18 lenders trimming variable rates for new customers, with 15 now advertising below 5.90%. Bendigo Bank cut its lowest refinancer rate by 0.15 points to 5.89%, though market leaders are already down near 5.69%. On the fixed side, five lenders cut, with AMP slicing some fixed rates by up to 0.50 points — the equivalent of two cash-rate moves.

“Competition among lenders continues to create opportunities for some households to cut their borrowing costs,” Canstar’s data insights director Sally Tindall noted. “Negotiating with your lender can get you on your way, but the bigger gains still typically come from refinancing.” Translation for brokers: the repricing and refinance conversation has rarely been more live — and refinancers are the one segment that grew in AFG’s numbers.

What This Means for Your Broking Business

A cooler aggregator quarter isn’t a reason to batten down the hatches — it’s a map of where the work is. Five moves worth making now:

1. Re-engage the wait-and-see pipeline

The defining feature of the quarter was enquiries that didn’t convert. Those people didn’t disappear — they paused. Go back through your May and June enquiry list and re-open the conversation now that budget uncertainty has cleared. The brokers seeing recovery are the ones making the call, not waiting for the phone to ring.

2. Lead with refinancers and repricing

Refinancers were the segment on the rise, and the lender rate war gives you a concrete reason to reach out. Run a review across your back book: anyone above ~5.9% is a repricing request or a refinance away from a better deal. This is warm, high-conversion work while purchase demand rebuilds.

3. Widen the lens on your lender panel

With non-majors taking 42% of lodgements, the answer for cautious or complex clients increasingly sits outside the big four. Make sure your accreditations and product knowledge stretch to the non-majors and specialists actually winning share.

4. Reframe the investor conversation

Negative gearing on existing properties is gone, but investors haven’t. Shift the discussion from tax breaks to fundamentals — cash flow, loan structure, offset strategy, and (for some) commercial or new-build alternatives. The clients who “paused” need a broker who can re-model their numbers under the new rules.

5. Get ahead of the August rate call

Whatever the RBA does, your clients will have questions the next morning. Pre-empt them: stress-test borrowing capacity now, talk buffers, and set expectations so a hold or a hike lands as guidance rather than a shock.

The August Wildcard: The RBA Decision Hanging Over the Pipeline

Every projection in AFG’s quarter carries an asterisk labelled “August”. The industry is genuinely split. Melbourne broker Grant Arbuckle of Loan Studio is in the hike camp: “I think the RBA will hike in August, another 25 basis points. I don’t buy the idea that June was the top,” pointing to trimmed-mean inflation lifting from 3.4% to 3.6% and the fuel excise cut expiring the same week the board meets.

Sydney’s Darren Liu of FinStreet leans the other way: “the RBA is more likely to hold the cash rate at 4.35% at its August meeting, while maintaining a clearly hawkish bias.” Economists broadly agree the cash rate has probably peaked, with most tipping no cuts until 2027 — though Westpac is the outlier, tipping two more hikes to 4.85% by year-end.

For brokers, the direction matters less than the readiness. A market that’s already “readjusting” will take its next cue from the RBA — and the broker who has already had the capacity conversation wins the deal when confidence returns.

The Bottom Line

AFG’s softer June quarter is best read as a market catching its breath, not losing its nerve. Lodgements eased about 5%, investors paused, and the big four leaked a little more share — but average loan sizes grew, refinancers rose, WA and SA powered ahead, and the brokers closest to clients are already seeing enquiry rebuild. The federal budget delivered a confidence wobble; it did not repeal the demand.

The opportunity for brokers is in the gap between “paused” and “gone”. Re-engage the pipeline, lean into refinancing while the rate war runs hot, widen your panel toward the non-majors winning share, and get clients RBA-ready before August. Watch the 5 August–style board decision, the July trimmed-mean inflation print, and whether investor volumes stabilise once the new tax settings bed down. Do that, and a cautious quarter becomes your busiest one.

Disclaimer: This article is for general information and professional development purposes only. It does not constitute legal, compliance, or financial advice. Brokers should consult their aggregator’s compliance team and, where required, seek independent legal advice regarding their obligations under the National Consumer Credit Protection Act 2009 and ASIC’s responsible lending guidelines. Figures and quotes are drawn from Australian Broker (brokernews.com.au) and Canstar analysis via Yahoo Finance; market conditions change quickly.