Commonwealth Bank, Australia's largest mortgage lender, announced a full-year cash profit of $11bn on Wednesday, supported by demand for its lending products, particularly mortgages. This comes despite a reported fall in investor loan applications.
The bank disclosed that investor loan applications have decreased by 28% since the Labor government's tax changes were announced in the May budget. Owner-occupier applications also saw a drop of 9%.
The decline in investor demand follows three interest rate increases by the Reserve Bank and federal government amendments to negative gearing and capital gains tax, which have made some property investments less profitable. However, CBA's chief executive, Matt Comyn, stated on Wednesday that the worst of the decline had passed by late June, with applications now slightly higher and holding steady. He expects an improvement into 2027.
RBA data indicates that new owner-occupier loans have fallen by approximately 10% since the start of the year, while investor loan growth has decreased by about 25%. Despite this, thousands of Australians are still purchasing investment properties.