Wild rate war looms as homebuyer numbers collapse

Housing credit growth. Source: ANZ In a major blow to big banks, new mortgage application growth is coming to a screeching halt, with the big four now seeing numbers collapse by double digits as investors stage a dramatic exit. Fresh data from the Australian Prudential Regulation Authority reveals home loan growth crawled by an “anaemic” 0.2 per cent in July, marking the single worst monthly performance for Aussie banks since July 2023 – a move that’s sparked one of the biggest variable rate battles in recent times. New mortgage applications saw a major drop for big four banks in the months following the federal government’s budgeted tax changes. Picture: Brendan Radke The sudden freeze, triggered by three Reserve Bank rate hikes in 2026 alongside new federal property tax changes, has wiped out buyer momentum and forced one big four giant into reverse, Canstar data insights director Sally Tindall said. Application numbers are tanking right across the board, with Westpac reporting a massive 20 per cent drop in applications since the federal budget, CBA falling 15 per cent and ANZ dropping 12 per cent once government assistance programs are excluded. Ms Tindall said the toxic “double...