Australia's housing market slump, driven by higher interest rates and scrapped tax incentives, has rattled mortgage-heavy banks. Shares in lenders have fallen nearly 10% in six months as house prices dropped over 5% nationwide since March. Commonwealth Bank of Australia reported a 15% decline in mortgage applications following May's tax changes. With mortgages comprising half to two-thirds of loan books, banks are pivoting toward corporate lending. Business investment has hit 25% of GDP—the highest in over a decade—creating demand for business credit. Citigroup analysts project business credit growth of 7% or more annually for the next two years. CBA's corporate lending, representing a quarter of its loan book, generates two-fifths of adjusted earnings and is growing faster than its mortgage operations. While the housing slowdown has dented bank shares, it offers an opportunity to redirect capital toward more profitable sectors. The shift could ultimately benefit lenders despite short-term market volatility.
The government's policy changes, including four rate hikes to 4.6% and elimination of buy-to-let tax breaks, accelerated the downturn. Sydney prices fell 5% in three months through September, according to Cotality. Analysts see this rebalancing as a strategic advantage, allowing banks to diversify revenue streams beyond volatile property markets.
Businesses investing heavily in renewable energy and AI infrastructure are driving demand for corporate financing. This trend aligns with banks' efforts to reduce dependence on housing loans and stabilize earnings through diversified portfolios.
स्रोत: Financial Times Companies · HeadlinesBriefing द्वारा सारांशित