ANZ flags mortgage slowdown as Westpac sees demand slip

“We have no doubt the mortgage market will slow down. It has been growing at around 8–9 per cent before, it’ll probably grow at 5–6 per cent. That’s the short- to medium-term,” he said.

“From a price perspective, who knows? For me, it could mean less price appreciation. Is it going to be negative? Is it going to be less positive? I’m not going to speculate about that.”

Matos was also explicit about how closely the expected market impact lined up with the government’s stated aims.

“The administration announced the intention to reduce price appreciation, improve levels of affordability, reduce the mix of investors in the home market space, incentivise new construction, and protect the first home buyer segment,” Matos said.

“I think those changes will play out as they were intended to play out.”

On investor credit, Matos noted that the direction was unquestionably down, stating investor lending could fall as a result by anywhere from 5–20 per cent.

“God knows, but it will go down because that’s the intention of the policy. Clearly, there will be less price appreciation,” Matos said.

Matos also said that ANZ was developing an in-house academy to train more frontline business bankers.

Matos’ remarks come roughly a month after the federal government announced its plans to limit negative gearing concessions to new residential builds, with existing investments grandfathered, and to replace the 50 per cent discount on capital gains with cost‑base indexation and a 30 per cent minimum tax rate on net capital gains.

Although the legislation has not yet passed Parliament, lenders are already embedding the new regime into their credit frameworks.

National Australia Bank (NAB), ANZ, and the Commonwealth Bank of Australia (CBA) have overhauled their serviceability calculators for investor loans to reflect the expected tax treatment, while Westpac has signalled it will shortly do the same.

CBA boss Matt Comyn has also been weighing in on the debate, saying he believes the CGT changes should be confined to housing rather than applied across all forms of investment.

“There’s a big difference in my mind between sort of passive asset accumulation versus productive capital or risk taking,” he said during an interview on ABC’s 7.30 program.

“If I’m just accumulating an asset and I’m passively holding that versus I’m investing in a start-up, a founder, a business, a junior mining explorer, I think that’s quite different, and I don’t think we want to change the incentives towards risk and enterprise and innovation.”

Investor activity and applications already sliding at Westpac

New data from Westpac’s consumer update revealed that new average mortgage application volumes for 3Q26 had dropped to 30,000 from 33,000 in 2Q26, with volumes after the federal budget falling again to 27,000.

The bank’s forecasts also point to slower growth across both investor and owner‑occupier portfolios.

Westpac expects total housing credit growth to ease from 6.5 per cent in financial year 2026 to 4.7 per cent in FY27, with the bank also forecasting investor credit growth to fall from 8.4 per cent in FY26 to 4.4 per cent in FY27 and remaining at that level in FY28.

The Australian Financial Review also reported that Westpac’s head of consumer banking, Carolyn McCann, said on Wednesday (10 June) that the government’s changes to investor tax settings had caused a 20 per cent fall in investor loan applications over the past three weeks.

“Combined with recent and expected interest rate increases, the changes are expected to see a 34 per cent fall in new investor activity near-term with the mix skewing towards newly built dwellings,” Westpac said in a recent update.

[Related: Comyn says CGT changes should only apply to property]