Mortgage growth has stalled, with four of the country’s top 10 banks retreating in September, and Macquarie Bank is responsible for almost half of the growth.
Australia’s 10 largest authorised deposit-taking institutions (ADIs) by housing loan balances added approximately $5.65 billion to their combined mortgage books in September, with four lenders shrinking and Macquarie Bank accounting for almost 43 per cent of the net increase.
The Australian Prudential Regulation Authority’s (APRA) September figures revealed that mortgage-book expansion remained subdued, despite the Commonwealth Bank of Australia (CBA) improving modestly and Westpac returning to growth after a colossal August decline.
The four major banks collectively added $4.54 billion, while Macquarie contributed $2.41 billion and across the remaining five lenders (ING Bank, Bendigo and Adelaide Bank, Suncorp Bank, Bank of Queensland (BOQ) and HSBC) balances contracted by a combined $1.30 billion.
The result extends the pattern of Macquarie supplying a disproportionate share of growth, with the bank in July contributing $2.22 billion of the approximately $6 billion added across the top 10.
Majors remain well below their June growth
CBA recorded the largest dollar increase, expanding its housing book by $2.80 billion, or 0.44 per cent, to $642.9 billion.
That represented a second consecutive improvement, following increases of $1.96 billion in July and $2.60 billion in August, although September’s expansion remained well below June’s $5 billion expansion.
Owner-occupier balances provided most of the increase, rising $2.43 billion, or 0.58 per cent, to $419.5 billion, compared with $3.47 billion in June.
Investor balances meanwhile increased by just $370 million, or 0.17 per cent, underscoring the more restrained expansion in that segment.
Westpac’s housing book returned to growth after August’s $14.12 billion contraction, increasing by $1.42 billion, or 0.28 per cent, to $505.3 billion.
Owner-occupier balances rose $1.72 billion, or 0.52 per cent, following a $9.96 billion decline in August, while its investor book continued to shrink, falling $290 million over the month.
National Australia Bank (NAB) was the only major bank to contract in September, with housing balances declining $660 million, or 0.19 per cent, to $351 billion.
Owner-occupier loans fell $380 million, or 0.16 per cent, while investor balances decreased by $280 million, or 0.24 per cent.
The contraction followed marginal growth in August and a slight decline in July, leaving NAB with the weakest residential mortgage growth among the majors over the year.
Australia and New Zealand Banking Group (ANZ), meanwhile, increased its housing book by $980 million, or 0.30 per cent, to $334.2 billion, well below June’s $3.12 billion expansion.
Owner-occupier lending rose $770 million, or 0.35 per cent, while investor balances increased $210 million, or 0.19 per cent.
ANZ’s growth, alongside NAB’s contraction, narrowed the difference between their books to approximately $16.8 billion, continuing ANZ’s gradual advance towards third position.
Macquarie carries an outsized share of expansion
Macquarie’s housing book increased by $2.41 billion, or 1.28 per cent, to $190.3 billion, giving it the strongest overall percentage growth among the top 10.
Its contribution was equivalent to approximately 42.7 per cent of their combined net increase and exceeded Westpac, NAB and ANZ’s combined $1.74 billion expansion.
Owner-occupier balances rose $1.76 billion, or 1.53 per cent, to $117.1 billion, the strongest percentage increase in that category among the 10 lenders.
Its investor book added $640 million, or 0.89 per cent, also delivering the largest dollar increase in investor balances.
Even Macquarie, however, remained below its June performance, when its housing book expanded by $3.39 billion.
Across Macquarie and the four majors, combined monthly growth dropped from approximately $16.06 billion in June to $6.95 billion in September, a reduction of about 57 per cent.
The weaker expansion comes against a deteriorating demand backdrop following four Reserve Bank cash rate increases this year and federal budget changes to investor property tax settings.
All four major banks now expect another increase on Tuesday, 3 November, with their forecasts pointing to a 25-basis-point rise, which would lift the official cash rate to 4.85 per cent, an 18-year high.
Recent major bank application figures also showed a significant drop in demand, with Westpac reporting post-budget declines of 26 per cent in investor applications and 18 per cent among owner-occupiers, while CBA reported respective falls of 28 per cent and 9 per cent.
NAB’s June-quarter update revealed that applications fell 15 per cent, including a 17 per cent decline among investors and 14 per cent drop among owner-occupiers, with ANZ also reporting a 12 per cent reduction in application flows between the May budget and late July.
Equifax subsequently recorded a 19.2 per cent annual fall in mortgage demand in September, its sixth consecutive monthly decline.
Strategic shifts add to smaller lenders’ divergence
Among the other lenders, ING increased its total housing balances by $350 million, or 0.47 per cent, while Bendigo and Adelaide Bank’s book slipped $50 million, or 0.07 per cent, to $64.3 billion.
Suncorp’s contraction continued, with balances falling $360 million, or 0.64 per cent, to $56.1 billion.
The bank has recorded negative monthly growth since February, with September delivering its sharpest decline since April.
That trajectory accompanies ANZ’s integration of the business. In early September, Suncorp began notifying its 1.2 million customers, along with brokers and aggregators, that banking products, services and digital platforms would progressively migrate to ANZ by 2027.
A subsequent announcement set 7 October as the end of new lending applications.
BOQ, meanwhile, moved in the opposite direction, adding $130 million, or 0.26 per cent, to reach $50.9 billion.
The increase followed flat balances in August and 23 consecutive months of contraction before that, marking a tentative return to growth.
BOQ remains in a rebuilding phase after suspending new-to-bank home loan originations through brokers for its BOQ retail brand in mid-2024, with ME Bank carrying much of the group’s mortgage growth.
HSBC recorded the steepest percentage contraction among the top 10, with housing balances falling $1.37 billion, or 3.97 per cent, to $33 billion. Its book has declined since July.
The reduction follows its late-July agreement to sell its Australian home and personal loan portfolio to Blackstone. That portfolio was valued at approximately $36 billion as at March, with completion expected in the first half of 2027.
The planned sale has also prompted reported competition from major banks seeking to refinance HSBC borrowers.
More broadly, brokers have also reported that banks are aggressively discounting for both new customers and existing borrowers considering refinancing, alongside offering generous cashback and reward incentives.
[Related: ‘Dangerous situation’: Economist warns cash rate could reach 5.35%]
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