The slowdown in the property market has hit banks’ mortgage books, with APRA data for July showing home loans grew by the slowest pace in three years.
Residential mortgages still grew in July, but by a relatively anaemic 0.2%, on the back of the three RBA rate hikes in 2026 and the Federal Government’s property tax announcement.
This is the slowest pace since July 2023 when the RBA had hiked the cash rate 12 times, four of which were doubles.
NAB’s mortgage book went backwards, albeit by 0.01% – the first drop since July 2024, while CBA and ANZ’s residential mortgages grew by the most in percentage terms out of the majors at 0.3%, according to today's release of the APRA Monthly Authorised Deposit-taking Institution (ADI) Statistics.
Even Macquarie Bank, which has posted monthly gains at an average rate of 2% over the last year, slowed to just 1.2%.
APRA: Residential housing loans | ||||
|---|---|---|---|---|
Term | Amount | Monthly change | Year-on-year change | Market share |
CBA | $637.5 billion | 0.3% Slowest since Feb 25 | 7% | 25% |
Westpac | $518.0 billion | 0.1% Slowest since Mar 25 | 6% | 21% |
NAB | $351.5 billion | -0.01% Slowest since July 24 | 5% | 14% |
ANZ | $331.9 billion | 0.3% | 4% | 13% |
Macquarie | $185.9 billion | 1.2% Slowest since Jan 25 | 26% | 7% |
All banks | $2.51 trillion | 0.2% Slowest since July 23 | 7% | 100% |
Source: APRA Monthly Authorised Deposit-taking Institution Statistics, July 26, released 31 Aug 26, prepared by Canstar. Includes owner-occupied and inv loans to households. ANZ figures do not include former Suncorp mortgages.
Big four bank reporting mirrors slide in new lending
Today’s APRA figures follow on the back of reported drops in new mortgage applications from Australia’s biggest banks:
- CBA reported a drop in the number of new residential mortgage applications of 15% since the Federal Budget on 12 May through to the end of July.
- Westpac reported an average drop of 20% in the number of mortgage applications between 15 May and 31 July compared to the previous quarter.
- NAB reported a drop of 15% in the value of residential mortgage applications in the June quarter compared to the previous one.
- ANZ has said the value of new mortgage applications was flat in the June quarter compared to the previous one, supported by the bank’s entry into the Home Guarantee Scheme in late March. Excluding this, the value of new applications were down 12% from the May Budget to the end of July.
Investors leading the retreat in the market slowdown
Home loans to investors increased by 0.1%, or $1.1 billion for the month of July, the smallest increase in both percentage and dollar terms since February 2024.
Loans to households: Owner-occupier vs investor | |||
|---|---|---|---|
Amount | Monthly change | Year-on-year change | |
Owner-occupier | $1.69 trillion | 0.3% slowest since Jul 23 | 6% |
Investor | $821.4 billion | 0.1% slowest since Feb 24 | 9% |
Source: APRA Monthly Authorised Deposit-taking Institution Statistics, July 2026, released 31 August 2026, prepared by Canstar.
Mortgage market deceleration forcing lender to cut rates
The combination of the RBA rate hikes and the Federal Government’s tax changes might have pushed home buyers on to the sidelines, however, it has forced lenders to put more competitive rates on the table for new customers in a bid to keep mortgage applications coming in the door.
Rate tracking by Canstar shows a total of 35 lenders have cut at least one new customer variable rate since 1 June, with the total list of lenders offering at least one variable rate under 6% at 52.
While the big banks have yet to cut new customer variable rates on paper, rival Macquarie has, although Westpac is the only one of the five biggest banks offering a rate under 6%.
Lowest variable rates from | |
|---|---|
Lender | Rate from |
CBA | 6.09% |
Westpac | 5.99% |
NAB | 6.09% |
ANZ | 6.25% |
Macquarie | 6.04% |
Source: Canstar. Rates based on owner occupier variable rate loans, excludes green loans. LVR requirements apply.
Lowest variable rates for refinancing | ||
|---|---|---|
Lender | Rate from | Min deposit |
Pacific Mortgage Group | 5.69% | 40% |
LCU | 5.79% | 5% |
The Mutual Bank | 5.79% | 20% |
Unity Bank | 5.80% | 5% |
P&N Bank | 5.83% | 20% |
Source: Canstar. Based on owner occupier loans, excludes construction, first home buyer only and green loans. Other eligibility conditions may apply.
Canstar’s Data Insights Director, Sally Tindall, says, “The mortgage market hit the brakes in July with the smallest rise in three years.
“While we haven’t seen as many hikes as there were back in 2022 and 2023, the double whammy of a rising cash rate and the Federal Government's property tax changes has brought mortgage applications to a crawl.
“The silver lining for active home buyers is that this slowdown is forcing lenders out of their comfort zone.
“While the big banks are holding out on paper, mid-tier and challenger lenders are actively cutting variable rates to fight for a shrinking pie of mortgage applicants.
“If you’re willing to look beyond the majors, there are genuine deals on the table.”
