New lending to property investors fell at its fastest pace on record through the three months to September, as landlords adjust to higher taxes against a backdrop of plunging property prices and rising interest rates.

The latest figures come as the country’s biggest lender, the Commonwealth Bank, reported that the share of its customers struggling to repay their mortgages had climbed to a 12-year high.

As Jim Chalmers, the treasurer, was again forced to defend his budget reforms, CBA’s quarterly trading update showed the share of borrowers 90 days or more behind on their repayments lifted from 0.73% of total lending, to 0.8%.

The last time arrears rates were higher was in 2014, according to previous trading updates.

Nathan Zaia, a senior equity analyst at Morningstar, said rising arrears rates were happening across the banking sector, and that they “probably hadn’t peaked”.

“Looking at arrears and people falling behind on their home loans, the trend has definitely been picking up,” Zaia said.

But the recent increase was from a low base, he said.

“We’ve had a long period of uncharacteristically very low arrears rates, so it’s not unexpected that they are starting to drift higher.”

Nico de Lange, the director of financial institution ratings at S&P Global, said that despite rising arrears, “it doesn’t look like there is any significant stress coming through” for the banking sector as a whole.

“Obviously after the five rate interest rate increases this year, we are watching things pretty closely,” de Lange said.

The latest Australian Bureau of Statistics figures showed the value of new investor loans plunged by nearly a third in the September quarter – the biggest drop in official records stretching back to 2002.

That was nearly double the previous biggest quarterly fall, the ABS said.

Mish Tan, the head of finance statistics at the ABS, said the data “suggests that investor activity is being influenced by factors beyond increasing borrowing costs, including the potential impacts of tax changes and expectations of lower house prices”.

The Albanese government in the May budget announced changes to the tax on capital gains for investors, and banned negative gearing for new landlords buying an existing home.

As investor appetite for housing collapsed by more than 30%, new lending to owner-occupiers fell by a more sedate 5.3% as part of an overall quarterly drop of 15% in new loans.

The ABS data also showed lending to first home buyers dropped in the quarter by 8.6%, suggesting rising interest rates and worries about the trajectory of property prices were keeping would-be homeowners on the sidelines – if not to the same degree as investors.

Bu Chalmers said the ABS figures also showed falling competition for first-time buyers as investors fled the market.

“Our tax reforms are all about helping more first home buyers into the housing market and we expect to see those benefits play out over years, not months,” he said.

“Because of our reforms, first home buyers will have to compete less with established investors for limited existing housing stock, and we’re starting to see that in this data.”

The number of new loans to investors to build a home was down 12% in the quarter, the ABS figures showed.

The Coalition has promised to repeal the investor tax changes were it to win government.

Andrew Bragg, the shadow housing minister, said: “Labor’s higher housing taxes are discouraging investment when Australia desperately needs more homes”.

“It is time these taxes were repealed before they do any more damage,” Bragg said.