Mortgage applications in Australia have fallen by 15% [1] since the federal budget was announced in May.
The decline signals a sharp contraction in housing market demand as potential buyers struggle with reduced affordability and economic volatility. This trend suggests that the combined pressure of monetary policy and fiscal changes is cooling the property sector.
Matt Comyn, CEO of Commonwealth Bank of Australia (CBA), said the slump is a result of several intersecting economic pressures. He cited interest rate rises and the tax changes announced in the federal budget as primary drivers. Comyn also pointed to global uncertainty, specifically mentioning an oil shock in the Middle East, as a contributing factor to the downturn.
According to Comyn, the softening trend began at the start of this year [2]. This follows a period of higher activity that peaked in October 2025 [2]. The subsequent drop reflects a broader struggle for consumers to secure affordable financing in a high-rate environment.
"The slump in home loan applications is due to affordability, interest rate rises, global uncertainty including the oil shock in the Middle East and the tax changes announced in the federal budget," Comyn said.
The decline highlights how sensitive the Australian housing market remains to external shocks and policy shifts. With applications tumbling since May [1], the bank's data suggests that the appetite for new debt has diminished significantly as the cost of borrowing continues to climb.
“Mortgage applications in Australia have fallen by 15% since the federal budget was announced in May.”
The sharp drop in loan applications indicates that the Australian housing market is reaching a tipping point where interest rate hikes and tax adjustments are outweighing the desire for home ownership. By linking the decline to both domestic budget policy and international energy shocks, the CBA data suggests that the domestic property market is increasingly vulnerable to global macroeconomic instability.
