Commercial property lending statistics: how much Australian banks lend by sector

Authorised deposit-taking institutions (ADIs) had $487.6 billion of commercial property exposures at 31 March 2026, according to the Australian Prudential Regulation Authority (APRA)¹. Exposures grew by $39.2 billion, or 8.7%, over the year to 31 March 2026, and by $7.5 billion, or 1.6%, over the March 2026 quarter. The March 2026 figures cover 120 reporting institutions.

Commercial property exposure limits, which include undrawn commitments, were $525.8 billion at 31 March 2026, $38.2 billion above actual exposures of $487.6 billion¹.

Exposures located in Australia totalled $442.7 billion at 31 March 2026, or 90.8% of total commercial property exposures¹. Overseas exposures totalled $44.9 billion, or 9.2%, at the same date.

APRA defines commercial property exposures as "facilities for the development, acquisition and improvement of real estate, where the servicing and repayment of the facility is dependent on cash flows generated by the property itself or other properties owned by the borrower"². Home loans to owner-occupiers and loans to individuals investing in residential property are excluded, as are loans to construction companies that are repaid by third parties.

Land development and subdivisions recorded the fastest growth in exposures among the seven property sectors over the year to 31 March 2026, at 30.2%, rising from $24.8 billion at 31 March 2025 to $32.3 billion¹. Other residential property recorded the second-fastest growth, at 17.9%, rising from $53.4 billion at 31 March 2025 to $62.9 billion at 31 March 2026. Property in sectors not listed separately grew 11.0% over the year, while industrial property grew 9.4%, from $86.7 billion to $94.8 billion. Tourism and leisure property grew 8.0% and retail property grew 6.7%, both below the 8.7% growth in all commercial property exposures.

Office property recorded the slowest growth among the seven property sectors, at 1.0%, rising from $119.1 billion to $120.3 billion over the year¹. The increase in office property exposures was $1.2 billion. Other residential lending and land development and subdivisions together grew 21.8% over the year, from $78.1 billion to $95.2 billion.

The four major banks had $369.4 billion of commercial property exposures at 31 March 2026, equivalent to 75.7% of all ADI exposures¹. Foreign branch banks had $86.4 billion, or 17.7%. Other domestic banks had $24.8 billion, or 5.1%. Foreign subsidiary banks had $6.6 billion, or 1.4%. Credit unions and building societies had $0.4 billion, or 0.1%.

The major banks' exposures grew 10.0% over the year to March 2026¹, while their share of all ADI exposures rose from 74.8% at 31 March 2021 to 75.7% at 31 March 2026. Foreign branch banks' exposures grew 2.9% over the year, while their share fell from 17.9% to 17.7% over the same five years.

The RBA's March 2026 Financial Stability Review reported that commercial property loans had risen as a share of Australian banks' assets "in recent years", after more than a decade of decline following the global financial crisis³. The RBA attributed the rise partly to growth in lending by the major banks.

The lender mix also varied by property sector. Foreign branch banks accounted for 53.1% of all tourism and leisure property exposures at 31 March 2026, at $8.5 billion¹. The four major banks accounted for 82.6% of land development and subdivisions exposures and 81.6% of other residential exposures at the same date.

Non-performing commercial property exposures were $3.1 billion at 31 March 2026, equivalent to 0.63% of total commercial property exposures¹. The share was 0.72% at 31 March 2025 and 0.66% at 31 December 2025. It reached 0.88% in September 2024, the highest level from March 2022 to March 2026. Its lowest level over the same period was 0.46%, in September 2022.

A non-performing exposure is one in default under prudential standard APS 220². APRA has published the measure for commercial property since the March 2022 quarter, replacing an impaired exposures measure that excluded exposures 90 days or more past due¹. At 31 March 2026, ADIs had $0.3 billion in specific provisions for non-performing exposures, equal to 10.5% of the total. Specific provisions and security together equalled 119.8% of the non-performing exposures.

Of the $3.1 billion in non-performing exposures, $2.7 billion, or 89.9%, was located in Australia at 31 March 2026¹. Other domestic banks had the highest non-performing share among the three largest lender groups at the same date, at 1.07%, compared with 0.67% for major banks and 0.30% for foreign branch banks. The RBA's March 2026 Financial Stability Review described the non-performing share of banks' commercial property loans as low by historical standards³.