- All big four banks have revealed major falls in new home loan applications and lending
- Drop-offs range between 12% and 20%, depending on measure and timeframes
- ANZ is the latest bank to reveal a 12% fall in the value of home lending after the May federal budget
All four big banks have disclosed hits to their home loan businesses with the smallest of them, ANZ, reporting a 12% drop in the dollar value of mortgage applications after the May federal budget.
ANZ joined Westpac and CommBank in releasing financial results this week, with Westpac reporting a 20% drop in new home applications since the budget and CommBank revealing a 15% plunge.
NAB is due to release its trading update next week but last month reported a 15% fall-off in home loan applications in the June quarter compared to the previous quarter.
ANZ's 12% drop in the value of home loan applications excludes transactions under the federal government's 5% Deposit Scheme and compares the period between 15 May and 31 July with the average of the previous quarter.
Together, the big four banks account for almost three-quarters of Australia's home lending.
See also: Compare home loans from the big four banks
What is happening in the housing market?
The home lending market was already cooling amid three consecutive RBA cash rate increases that kicked off 2026.
But they were before the federal government announced investor tax changes in its 12 May budget, amending negative gearing and capital gains tax concessions.
Property analysts say a 'perfect storm' of higher interest rates, investor tax changes, and uncertainty surrounding the Middle East conflict triggered a housing market downturn that is spreading nationally.
It's believed many would-be buyers are uncertain about purchasing a property when home values are falling and are adopting a wait-and-see approach.
Others, particularly first homebuyers, are likely struggling with loan serviceability requirements in the higher interest rate environment.
See also: Mortgage demand plunges, first homebuyers hardest hit
Meanwhile, the number of capital city listings has climbed to a seven-year high, Domain reported this week, turning the tide of recent years to hand buyers' more control in the market.
Where is the market heading?
Earlier this week, ANZ forecast Sydney house prices could fall by as much as 14.5% as the housing downturn gathers pace.
ANZ's latest housing market update sees a peak-to-trough decline of 10.6% across all capital cities, with the decline happening more rapidly than the bank initially thought.
The bank's analysts expect prices to start recovering through the second half of 2027, supported by 50 basis points of cuts to the RBA cash rate.
This broadly supports the view of other property market analysts who believe Australia's ongoing housing shortage and population growth will offset losses and put a floor under the current market downturn.
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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 5.98% p.a. | $2,978 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.89% p.a. | 5.80% p.a. | $2,962 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.99% p.a. | 5.95% p.a. | $2,995 | Principal & Interest | Fixed | $0 | $0 | 60% |
| Promoted | Disclosure | ||||||||||
5.93% p.a. | 5.93% p.a. | $2,975 | Principal & Interest | Variable | $0 | $395 | 70% | Disclosure |
