Westpac, ANZ, NAB, CBA bank shares plunge as grim data released
Westpac's third-quarter update, released today, shows a 20% fall in mortgage applications and a forecast that investor housing credit growth will nearly halve — from 9.1% this year to around 4.5% in 2027. Total housing credit growth is expected to slide from 6.8% to 4.7% next year. Westpac's shares fell as much as 5.9% on the news, the bank's worst day since April 2025, and the pressure spread across the sector, with CBA, NAB and ANZ shares all down more than 2% on the same day. Westpac's quarterly cash earnings came in at A$1.8 billion, down from A$1.9 billion a year earlier, even as its lending book still grew 2%. CEO Anthony Miller said housing undersupply and population growth should partly offset the drag from rates and policy, but the volume numbers tell a tougher story for brokers on the ground.
It's not just Westpac
NAB's own trading update shows the same pattern. Mortgage applications there were down roughly 15% over the June quarter, with application values down 9%, which NAB attributed partly to uncertainty around the tax changes. The slide had been building since winter: Westpac's head of consumer banking said back in June that the tax changes had already driven a 20% fall in investor loan applications in just three weeks, with a 34% fall in new investor activity expected near-term.
Read next: Borrowing capacity emerges as top constraint for seasoned property investors
On prices, CBA's economists have cut their December 2026 dwelling price growth forecast to 3%, down from 5% before the budget, citing the negative gearing changes. The bank expects the impact to hit hardest in apartments and lower-priced segments, where investor activity is concentrated. An ANZ executive summed up where the market is heading: growth that had been running at 8–9% a year is now more likely to sit at 5–6%.
The policy backdrop
Since the federal budget, CBA, ANZ, NAB and other lenders have progressively rewritten how they treat negative gearing in serviceability assessments. The rule is consistent across the majors: contracts signed on or before 12 May 2026 keep negative gearing in the borrowing-power calculation; anything signed after that only counts if the property is a new build. ANZ, NAB, Westpac and Macquarie confirmed the change first, with CBA following after initially holding out. CBA went further in late May, telling brokers to edit and resubmit affected files in ApplyOnline for reassessment.
The impact on client borrowing power is significant. An investor on a 37% marginal tax rate is looking at roughly a 10–15% cut to borrowing capacity, rising above 20% for higher earners or multi-property investors. One broker estimated a client on $100,000 income with no existing debt could see investment borrowing capacity fall from $750,000 to $600,000 — a 20% cut — from the loss of negative gearing alone.
For brokers advising investor clients
Contracts signed before 12 May remain grandfathered, so it's worth checking that paperwork clearly supports the original signing date. For anything signed after that cutoff, established-property purchases now need to be modelled without negative gearing unless the property qualifies as a new build. Approval timelines are running slower as lenders keep tuning their calculators, and legislation still hasn't passed Parliament, so more changes are likely. First-home buyer and new-build segments are shaping up as the relative bright spot while investor volumes compress across all four majors.
