Australia's Westpac sees major mortgage applications decline since tax changes (updated)

Westpac Banking

11/06/2026 02:08

Adds details from second paragraph
By Scott Murdoch

    SYDNEY, June 11 (Reuters) - Australia's second-largest lender Westpac WBC.AX said on Thursday it had seen a 10% decline in mortgage applications since the centre-left Labor government announced major tax changes in its May Budget.
The biggest decline had been in investor loan applications which has fallen 20% in that time, the bank said.
Westpac said it expected investor housing credit growth to almost halve from 8.4% in 2026 to 4.4% in the following two years.

        The Labor government said in May it would restrict negative gearing, which allows investors to offset property losses against taxable income, to newly built homes to channel investment into new supply. 
A 50% capital gains discount on assets held for more than a year would be scrapped, replaced with a tax on inflation-adjusted gains. A 30% minimum tax on net capital gains will be introduced from July 2027.

    Together, the measures are expected to deepen a slowdown in Australia's property market, with prices easing across most capital cities and auction clearance rates falling to their lowest since the pandemic.
Westpac's consumer banking chief executive Carolyn McCann said on Thursday demand for mortgages has weakened since the tax changes were announced about three weeks ago.
     "We have seen the recent changes in the federal Budget policy slow or dampen investor lending appetite," McCann told an analyst briefing.
McCann said allowing negative gearing to remain on existing investments and new properties in the future should help cap the "downside" for the country's real estate market.


        
  

 (Reporting by Scott Murdoch in Sydney; Editing by Muralikumar Anantharaman and Shri Navaratnam)
 ((Scott.Murdoch@thomsonreuters.com;))