Westpac Banking Corporation said mortgage applications in Australia have fallen by about 20 percent [1] since the May 2024 federal budget reforms.
This downturn suggests a cooling housing market as potential buyers react to shifting fiscal policies and increased borrowing costs. The trend indicates a potential shift in buyer behavior that could impact long-term property valuations across the country.
Westpac said the decline was due to the Labor Party's controversial property-tax reforms introduced in the May budget [3]. These measures were designed to alter the tax landscape for property owners, but the bank said they have deterred new applicants from entering the market.
Beyond tax policy, the bank said borrowing costs have risen significantly. There have been three interest-rate hikes [2] earlier this year, which have increased the monthly burden for new homeowners.
The combination of these factors has created a challenging environment for prospective buyers. While the budget reforms set the initial stage for the decline, the subsequent rate hikes have further suppressed demand for home loans.
Westpac's data reflects a broader trend of tightening credit conditions in the national mortgage market. The bank said the drop in applications is a direct result of the current economic and legislative climate.
“Mortgage applications in Australia have fallen by about 20 percent”
The sharp decline in mortgage applications highlights the sensitivity of the Australian housing market to both legislative changes and monetary policy. By linking the drop to both tax reforms and rate hikes, the data suggests that the cumulative effect of government policy and central bank actions is currently outweighing the demand for home ownership.
