Westpac Bank Reports 20 Percent Drop in Mortgage Applications After Budget

A woman passes the logo of Australian bank Westpac in Melbourne, Australia, on May 27, 2026. William West/AFP via Getty ImagesLending for homes is moderating as consumers battle cost-of-living pressures and high interest rates, Australia’s second-largest bank says.Westpac on Aug. 10 reported results for its third quarter, which included the May federal budget announcements outlining changes to capital gains tax concessions and negative gearing restrictions.An undersupply of housing, combined with population growth, was expected to partially offset the impact of higher rates and Labor’s policy changes, the bank said.However, it also expects housing credit growth to moderate to 4.7 percent in fiscal 2027, from 6.8 percent in its current financial year.A sharper fall-off in investor loan applications was noted to 4.5 percent next year, from 9.1 percent this year.The bank had an average of 29,000 mortgage applications a month in the quarter.But looking at its post-budget run rate, the decline was 20 percent between May 15 to July 31, after the budget was released on May 12.For the quarter, Westpac reported an unaudited bottom-line net profit of $1.8 billion (US$1.27 billion), up two percent on the two-quarter average in the first half of fiscal 2026, after excluding notable items.“We have a strong balance sheet and are focused on supporting our customers through uncertainty while delivering sustainable returns,” CEO Anthony Miller said.“While many households are feeling the impact of cost-of-living pressures, businesses are investing and our customers have continued to show resilience.”Westpac reports its full-year results in November.By Kaaren Morrissey in Sydney