The cooling sentiment is reflected in the bank's long-term projections, with total housing credit growth expected to slip to 4.7% by 2027, down from 6.8% in 2026. Investor appetite is projected to bear the brunt of this decline, with credit demand forecast to effectively halve from 9.1% this year to 4.5% by 2027. This trend mirrors broader instability across the sector, as National Australia Bank recently reported a 15% drop in applications over a similar period.

Westpac CEO Anthony Miller maintains that persistent housing shortages and strong population growth will serve as a buffer against the combined weight of high interest rates and regulatory shifts. Despite these headwinds, the bank posted cash earnings of A$1.8 billion for the quarter ending June 30, a slight retreat from A$1.9 billion a year prior. While household budgets remain strained by the cost of living, the bank’s core net interest margin remains stable, supported by a 2% increase in its lending and deposit books.