Westpac is funding 30 per cent fewer housing builds, ANZ sees prices falling until 2028, and an MP puts their mortgage profit at $234 a week

The heads of Westpac and ANZ have told federal parliament that a year of falling prices and rising interest rates has not made housing more affordable, and that the shortage of new homes is getting worse, not better.

Appearing on Thursday before the House of Representatives committee’s annual review of the four major banks, Westpac chief executive Anthony Miller said his bank is now lending to 30 per cent fewer housing construction projects than it was up to a year and a half ago.

He put most of the fall down to costs. Higher construction costs, he said, are making affordable apartments and townhouses less attractive to build. He described the planning system as “an anchor on our growth” and urged a “break-glass” decision to speed up approvals.

“Australia is simply not building enough housing to meet demand,” Miller told the committee.

Haven’t lower prices helped buyers?

Not according to the evidence on Thursday. Liberal MP Simon Kennedy cited Housing Industry Association figures showing housing has become 5.4 per cent less affordable over the past 12 months, even though prices have fallen 8 per cent. Higher interest rates have more than eaten up the savings on the purchase price.

ANZ chief executive Nuno Matos said his bank expects prices to fall about 13.5 per cent from peak to trough and to stabilise in 2028. For a buyer watching the market, that means ANZ does not see the bottom for at least another year.

Miller said the budget’s changes to negative gearing and the capital gains tax discount, which kept the concessions for new builds, had produced “some improvement” but had not come through as quickly as hoped.

The day before the hearing, official figures showed investor home loans had fallen a record 30.6 per cent in the year to September. Labor has called that a win for first home buyers.

How much do banks make from a mortgage?

That was the sharpest exchange of the day. Husic, the Labor MP who chairs the committee, said banks make close to $300,000 in profit over an average owner-occupier 30-year loan, about $40,000 more than before rates began rising earlier this year. That works out, he said, to about $234 a week from an average family.

Matos rejected the numbers. He said the mortgage business is one of the least profitable parts of Australian banking and that ANZ was “doing our job”.

Who is falling behind?

ANZ gave the committee a snapshot of its own customers. Five in every 1,000 mortgage holders are in hardship, up about 10 per cent in six months, and the bank expects arrears to keep rising for a time. Loan applications have fallen 12 per cent over six months, driven by a 27 per cent drop among investors, while applications from owner-occupiers are roughly flat.

What else did the bank chiefs say?

Matos repeated his warning that global markets are in a “dangerous situation”, with interest rates rising and governments and companies competing for capital. Both chief executives called for cuts to government spending.

Why does it matter?

This year’s hearings come as the cost of a mortgage has climbed through 2026, the construction pipeline has slowed and households are watching prices fall without feeling better off.

The banks’ message to parliament was that they cannot fix supply on their own: until it is cheaper and faster to build, lower prices will not translate into more homes.

Go deeper with VNN Premium: Buy now or wait for ANZ’s 2028 bottom? On a $750,000 home a year of waiting is worth $64,800, and a 2.2 per cent rise flips it — the full buy-or-wait sums under three price paths, the borrowing power each rate rise takes away, and the WA stamp duty bonus for first home buyers.