澳洲四大银行警告房价跌势未止，明年回升难补今年损失

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The housing downturn is starting to bite and Australia's biggest banks are feeling it.

Australia's tumbling property market is set to fall even further with the nation's big [music] four banks warning while home values will recover next year, it won't be enough to make up for this year's losses.

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Of course, housing has softened. House prices peaked in March this year. Applications actually peaked [music] last year.

Welcome to the Bloomberg Australia podcast. I'm Chris Burke. This week we're looking at the worsening outlook for the housing market and what the bosses of our biggest banks are saying about it this earning season. I'm joined by Sydney-based finance editor Adam Haigh to unpack what we learned about where house prices could be heading, how long the downturn might last and what it all means for the banks' bottom lines.

Adam, welcome back to the podcast.

Thanks very much. It's great to be back.

Adam, we normally refer to house prices as the great Australian barbecue stopper. I don't know about Sydney, but here in Melbourne we're still some way off from lighting up the Barbie. That hasn't stopped everyone from talking relentlessly about house prices just in gloomier tones than usual. Can you set the scene for us? What's happening in the housing market?

Well, I totally agree with you. You know, it's really on the front of everyone's lips. I mean, I was just out on Saturday night and there was fair amount of conversation about about the softening in in the market. And I think really what this comes down to is, you know, a few things. We've we've already seen you know, prices come down quite a bit. That's obviously clear. We're seeing a softening in auction clearance rates.

So, there is you know, quite a lot going on in the softening of the market and there's a few reasons why that's happening. I think it's important to kind of look at those. But really you got things happening at the same time. And the first of those is that interest rates have gone up. So, three rises by the RBA early this year, that's kind of set the scene for higher borrowing costs for a lot of people. Um and then you've had the tax changes that were announced in the May budget that have softened softened the appetite from property investors um quite significantly.

Um and then you have, you know, just just that overall feeling of, well, if this is kind of going to get a little bit worse, do I really need to sell my house? Why don't I wait and just leave it for a few months and see. So, those three things coming together in this confluence of of of uh of negative activity really, which is combining to um to make it a pretty um a pretty poor outlook for for the housing market.

Yeah, and we've been writing about these things for some time. Uh but uh last week it started to feel a bit more real. Uh we heard from uh our biggest banks, CBA, Westpac, and ANZ, and then just on Monday we heard from National Australia Bank. What did we learn from the big four about where the housing market might be going? The mood sounded pretty downbeat.

It It was. And And clearly what they're seeing is a drop in mortgage applications, and that's to the order of, you know, 10, 12, 15% down um in that period from kind kind of the middle of May to to to now. Um so, all of the banks are saying, well, listen, we've already seen this decrease in in activity of people wanting to apply for a mortgage at our at our banks. And they're also saying, you know, on the one hand, there's Matt Comyn, the CEO of CBA, who's saying, "Hang on a second, like some of this is stabilizing here.

Um yes, we've seen a softening of of activity here, but, you know, don't don't get too carried away. Um you know, he's kind of maybe putting a slightly brighter to tone on things." And then some of the other leaders, you know, maybe making a more of a of a kind of a negative forecast forward about what might happen um from here. But, you know, this does come at a pretty tricky time for the economy. And and as house prices slow and less mortgages um get applied for, of course, it's it's bad for the banks in terms of their profitability.

It does curb a big component of how banks make their money. And so, you have to kind of see that in the one side of, you know, slowing credit demand is a tricky thing for banks to navigate. But meantime, these banks are still doing pretty well, you know, they're still spitting out some pretty good profit numbers um for the period that we've just been hearing about.

Yeah, you're right. Commonwealth painting uh we're trying to paint a a fairly more optimistic picture, I guess, than than some. I mean, he made the point on his earnings call that national dwelling prices have fallen by approximately 2.8% since their March peak. But they've increased nearly 70% in the past 7 years. So, I guess that context is pretty important. Um but, you know, you're right. Uh this is this is stuff that affects their bottom line.

On Friday, we got that um we also got some pretty nasty official lending data for property investors from our friends at the Australian Bureau of Statistics. Take us through what those numbers showed.

Yeah, they they they showed more of the same picture, really. So, new loans to home investors down more than 10% in the June quarter. And even more exaggerated those in in New South Wales, which is of course where where Sydney is. Um new loans there for for home investors down more than 14% on the quarter. So, um clearly there are pockets where um this is more pronounced in and some of the big um some of the big markets are really feeling the downturn.

But I think back to your point about the context of just how much house prices have gone up, which Comyn was quite willing to to articulate. He does make a point, you have to understand where prices have come from. And we've had such a great boom for such a long time in the Australian housing market. So some softening off a peak is not necessarily something to get, you know, really worried about. The question from here is the extent to which prices continue to to decline.

And of course, um you know, there are a few different views on that, but it's it's not necessarily the case that prices will continue declining at the rate that they have done um over the last few months.

I guess for investors the question is how much will this affect the banks? We know CBA is the market leader in mortgages, followed by Westpac. Does that necessarily make them the most vulnerable to a housing downturn or or other other lenders that might be taking greater risks?

Well well, you are right. CBA has about 24 25% of the entire mortgage market of the country. So clearly, um you know, any move either way for the housing market is going to have a big impact on on on its book. Um but to the extent that they are the biggest, they can, you know, weather the storm a little bit better. Um I think you've got a lot of dynamics going on. If you look at ANZ Bank for example, you know, they've been trying to kind of come back up after a few years um out in the relative wilderness to try and claw back a bit of that market share.

And of course, it's a tricky time to be doing that, especially at a time when Macquarie have been very aggressive in in gaining market share. They've come from a very low base up to, you know, around 7% of of total market share recently. So um there are a lot of competitive dynamics still going on between these four or five big big banks in the market. And I think the expectations are that those competitive dynamics will only get stronger and and fiercer over the next kind of 6 months or so because if we're in a a protracted period of of a downturn with prices, um it does put pressure on margins and [snorts] therefore banks have to be quite deliberate about what they're going to do.

Are they going to offer some some, you know, some bonuses to get people in um and try and go after a bit more of th