Westpac Reports A$1.8 Billion Profit Amid Mortgage Application Slump

Westpac Banking Corp reported an unaudited net profit of A$1.8 billion for the quarter ending June 30. The bank achieved this result through growth in deposits and loans, which offset a significant downturn in the Australian housing market. However, the lender reported a 20% decline in mortgage applications between the May federal budget and the end of July.

Chief Executive Anthony Miller attributed the lending slump to high interest rates, cost-of-living pressures, and Australian Government decisions to restrict negative gearing and capital gains tax concessions for property investors. Westpac forecasts that total housing credit growth will slide to 4.7% in 2027 from 6.8% in 2026, while investor credit demand is expected to drop from 9.1% this year to 4.5% in 2027. National Australia Bank reported a similar trend, noting a 15% decrease in mortgage applications last month.

To manage these headwinds, the bank is pursuing productivity savings exceeding A$550 million for the 2026 financial year. Miller noted that while mortgage demand is moderating, population growth and a chronic undersupply of housing are expected to partially buffer the impact of government policy and interest rate hikes.