Australia's big banks slash 2026 house price forecasts amid investor tax policy changes
Consensus Summary
Australia’s two largest banks, ANZ and NAB, have sharply revised their 2026 house price forecasts downward, predicting national capital city prices will fall 2-2.1% this year after previously expecting gains of 2-2.8%. The downturn is most severe in Sydney and Melbourne, where ANZ forecasts an 8% decline and NAB predicts 6-7%, driven by the proposed removal of negative gearing and capital gains tax discounts for property investors. Westpac’s data shows investor loan applications have plunged 20% in three weeks, signaling a rapid pullback in market activity. Both banks now expect price declines across all eight capital cities in 2027, with total housing credit growth projected to halve by early 2028. While a recovery is anticipated by 2028, it hinges on uncertain factors like falling interest rates and geopolitical stability, neither of which are guaranteed.
✓ Verified by 2+ sources
Key details reported by multiple sources:
- ANZ and NAB revised their 2026 capital city house price forecasts from +2.8%/+2.0% growth to -2.1%/-2.0% declines respectively
- ANZ forecasts Sydney and Melbourne house prices to fall ~8% in 2026, with NAB predicting 6-7% drops in those cities
- Westpac reported a 20% drop in housing investor loan applications over three weeks since the proposed tax policy changes were announced
- ANZ expects total housing credit growth to fall from 7.1% year-on-year in Q1 2026 to a low of 2.9% in early 2028
- Both ANZ and NAB now predict price falls across all eight capital cities in 2027, following earlier expectations of mixed performance
- The proposed removal of negative gearing and capital gains tax discounts for property investors is cited as the primary catalyst for the downturn
- Carolyn McCann, head of Westpac’s consumer bank, declared the 20% investor loan application drop in early June 2026
Points of Difference
Details reported by only one source:
- The article mentions 'an avalanche of sellers' and 'increasing levels of stale stock' as key market indicators (no specific numbers provided).
- The Business Briefing newsletter is referenced as the source of additional coverage.
- The article mentions 'an avalanche of sellers, increasing levels of stale stock sitting on property portal shelves, and around 50 per cent' (incomplete sentence, likely referring to investor activity).
Contradictions
Conflicting information between sources:
- Neither source provides a specific date for when ANZ and NAB revised their forecasts, but both imply it was within days of each other in mid-June 2026.
Source Articles
Two big banks have slashed their house price forecasts. The numbers are hair-raising
The signs are difficult to ignore: an avalanche of sellers, increasing levels of stale stock sitting on property portal shelves, and auction clearance rates wallowing around 50 per cent.
Two big banks have slashed their house price forecasts. The numbers are hair-raising
The signs are difficult to ignore: an avalanche of sellers, increasing levels of stale stock sitting on property portal shelves, and auction clearance rates wallowing around 50 per cent.