Westpac mortgage applications slump amid policy uncertainty

Westpac (ASX:WBC), Australia's second-largest bank by market capitalisation, has reported a sharp downturn in mortgage applications, driven by escalating Middle East conflicts and anticipated domestic tax reforms.

Home-loan applications have dropped to an average of 30,000 per month for the fiscal third quarter commencing April 1.

This represents a 9.1% decline from the previous quarter’s monthly average of 33,000.

The downward trend initially triggered following US and Israeli strikes on Iran in late February, which disrupted global market sentiment.

Prior to the geopolitical tensions, Westpac was processing an average of 35,000 applications monthly in the quarter ending December.

The slump has accelerated further following the federal government's post-budget announcement signalling intentions to overhaul capital gains tax concessions.

Westpac confirmed that since the May 12 federal budget, application volumes have plummeted to a monthly run rate of just 27,000.

The compounding impact of international instability and domestic policy uncertainty highlights growing caution among Australian buyers, marking a cooling phase for the nation's banking sector and broader housing market.