Westpac’s housing loan book substantially fell in August, with mortgage growth at the largest lenders grinding to a halt.
Westpac’s housing loan book fell by $14.12 billion in August, with new data showing mortgage-book growth slowing sharply across the country’s 10 largest authorised deposit-taking institutions (ADIs).
The Australian Prudential Regulation Authority’s (APRA) latest monthly ADI statistics showed that Westpac’s total housing portfolio contracting by $14.2 billion or 2.73 per cent during the month to $503.8 billion, a substantial reversal after the major bank recorded a $2.78 billion increase in June.
The fall was spread across both borrower segments, with Westpac’s owner-occupier book dropping by $9.69 billion, or 2.83 per cent, to $332.9 billion, while its investor portfolio shrank by $4.43 billion, or 2.53 per cent, to $171 billion.
While Westpac remains Australia’s second-largest housing lender behind Commonwealth Bank of Australia (CBA), the gap between the two banks widened markedly over the month as CBA continued to add to its mortgage portfolio.
CBA’s total housing loan book rose $2.60 billion in August to $640 billion, and while still a solid dollar increase, it represented a material step down from the $5 billion rise recorded in June.
The major bank’s owner-occupier book grew by $2.16 billion to $417.1 billion, while investor lending increased by $430 million to $222.9 billion.
Yet both segments were weaker than the gains reported in June.
The National Australia Bank (NAB) and Australia and New Zealand Banking Group (ANZ) also recorded marginal overall growth.
After declining in July, NAB’s housing book increased by $200 million, or 0.06 per cent, to $351.7 billion.
Its owner-occupier portfolio edged up $120 million to $236.3 billion, and its investor lending lifted by $80 million to $115.3 billion, a considerably weaker outcome than its $1.77 billion total increase in June.
Meanwhile, ANZ’s total housing portfolio also grew by just $200 million, reaching $333.2 billion, with the result sharply lower than the $3.12 billion gain reported in June.
Macquarie remains the growth outlier
Macquarie Bank again bucked the broader slowdown, expanding its housing loan book by $1.98 billion, or 1.06 per cent, to $187.9 billion in August.
Although the increase was down from its $3.39 billion rise in June, it was the strongest percentage gain among the larger lenders.
Its owner-occupier lending grew by $1.38 billion, or 1.21 per cent, to $115.3 billion, while its investor portfolio rose by $600 million to $72.6 billion.
Macquarie had already played an outsized role in July’s mortgage-book growth.
The 10 largest ADIs added around $6 billion to their combined housing books during that month, but Macquarie accounted for $2.22 billion of that increase.
Growth eases at mid tiers
ING Australia also recorded milder growth, with the bank increasing its book by $460 million, taking its home loan portfolio to $75 billion.
Several mid tiers also saw declines, with Bendigo and Adelaide Bank’s housing portfolio falling by $90 million, or 0.14 per cent, to $64.4 billion, while Suncorp Bank’s book dropped by $270 million, or 0.48 per cent, to $54.4 billion.
HSBC Australia recorded a $470 million, or 1.35 per cent, decline to $34.4 billion.
The Bank of Queensland’s (BOQ) housing portfolio was unchanged at $50.7 billion, and while the bank did not return to growth, the flat outcome interrupted a 23-month run of monthly contractions.
Several of August’s weaker results also sit alongside lender-specific strategic changes.
Suncorp’s declining mortgage book comes as ANZ advances its integration of the business.
In early September, Suncorp told its 1.2 million customers, as well as brokers and aggregators, that banking products, services and digital platforms would progressively shift to ANZ by June 2027.
ANZ’s June-quarter update had already shown Suncorp’s mortgage book declining by 1 per cent, from $62 billion to $61 billion, suggesting that the continuing contraction is occurring during a period of portfolio transition.
HSBC’s decrease also follows its agreement in late July to sell its approximately $36 billion Australian home and personal loan portfolio to Blackstone, with completion expected in the first half of 2027.
The transaction has also intensified competition for HSBC mortgages as lenders seek to attract refinancing borrowers.
BOQ, meanwhile, remains in a rebuilding phase after pausing new-to-bank home loan originations for its BOQ retail brand through the broker channel in mid-2024.
Cooling demand reshapes lending
The slowing in mortgage balances is emerging against a weaker demand backdrop.
Australia has seen four Reserve Bank cash rate rises in 2026, while the federal budget introduced major changes to investor tax settings.
Both developments have contributed to a cooler mortgage-demand environment, particularly as borrowing capacity comes under pressure.
Major-bank application data has also pointed to a major deterioration in demand after the budget, with ANZ, Westpac, CBA and NAB reporting substantial falls in applications across both owner-occupier and investor lending.
Equifax data showed overall mortgage demand was down 14.1 per cent year on year in August 2026, marking the fifth consecutive monthly fall.
[Related: Number of borrowers unable to refinance spikes]
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