Westpac Mortgage Applications Fall as Tax Changes Sap Demand

Westpac Banking Corp. mortgage applications are projected to experience their worst quarter in a year, a decline attributed to recent tax changes impacting property investors and subsequently weakening demand for real estate. The bank's chief executive, Peter King, stated this week that the impact of these tax reforms is becoming increasingly evident in the market. These changes, which took effect on July 1, 2024, have altered the financial incentives for individuals and entities looking to purchase investment properties, leading to a noticeable slowdown in mortgage activity. Analysts suggest that the reduced tax deductibility for rental property expenses is a primary driver of this downturn, making property investment less attractive. Westpac, as one of Australia's major lenders, is closely monitoring these market shifts and their potential broader economic implications. The bank anticipates that this trend will continue for the remainder of the current financial quarter, with a potential for further adjustments in the housing market as investors recalibrate their strategies.