Westpac Banking Corp shares fell 5.14% to A$35.98 on Monday, sharply underperforming the broader market, after the lender reported a sharp drop in mortgage applications and warned that changes to Australia’s property tax rules could weigh heavily on investor housing demand, according to Investing.com. The S&P/ASX 200 was down about 0.5% on the day, while the financials sub-index fell around 1.9%.
Westpac said average monthly mortgage applications fell 20% to about 26,000 between May 15 and July 31, from around 29,000 previously. Investor applications fell 26%, while applications from owner-occupiers declined 18%. The bank linked the slowdown to the Australian government’s changes to property tax settings announced in the May budget, which include changes to negative gearing and capital gains tax concessions that reduce some of the tax benefits available to property investors.
Westpac expects the impact to persist, forecasting investor housing credit growth to slow to 4.5% in 2027 from 9.1% in 2026, before easing further to 4.4% in 2028. The weaker mortgage outlook overshadowed otherwise resilient quarterly results: the bank reported quarterly cash earnings of about A$1.8 billion, down from A$1.9 billion a year earlier, while loans and deposits each grew 2%, and its common equity tier-one capital ratio stood at 12.1%.
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Investing.com — Westpac shares slide 5% after mortgage applications plunge 20% on tax changes
