# Australian Housing Affordability Declines Despite Falling Property Prices Parliamentary inquiry reveals construction slump and rising bank profits amid economic pressures. - **Source:** [SBS News – Australia](https://www.sbs.com.au/news) - **Published:** 2026-11-12 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/9afd6cd5-3882-4eba-b4fa-7ef52e3e6695 ## Housing Affordability Paradox Despite a forecast 13.5 percent decline in home prices from peak to trough by 2028, housing affordability has worsened. Data indicates a 5.4 percent decrease in affordability over the last year. High interest rates and persistent cost-of-living pressures continue to outweigh the benefits of lower property valuations for potential buyers. ## Construction Lending Slump Westpac reported a 30 percent decline in lending for new housing construction projects compared to eighteen months ago. High labor and material costs have deterred developers, resulting in only 5,300 apartments and townhouses built this year, down from 8,000 previously. Developers currently prioritize high-end dwellings over more affordable housing options. ## Investor Market Retreat Investor home loans plummeted by a record 30.6 percent in the year leading up to September. While the government introduced carve-outs to incentivize new build investments, banks report slow uptake. The volume of investor loans directed toward new builds increased from 17 to 28 percent between March and September quarters. ## Bank Profitability Scrutiny Inquiry chair Ed Husic noted that big banks earn nearly $300,000 in profit from an average 30-year owner-occupier loan. This profit margin has increased by $40,000 since interest rates began rising. ANZ CEO Nuno Matos disputed these figures, claiming the mortgage business is among the least profitable sectors in Australian banking. ## Economic Capital Competition ANZ executives warned that the national economy faces a dangerous situation due to intense competition for capital. Governments and corporations are simultaneously funding artificial intelligence, defense capabilities, and energy projects. This unprecedented level of spending, combined with high interest rates and budget deficits, creates significant pressure on the broader financial system. ## Hardship and Arrears Rising Financial stress is becoming increasingly visible among bank customers. ANZ reported that hardship cases have reached five in every 1,000 customers, marking a 10 percent increase over the last six months. Loan applications have fallen 12 percent overall, with investor interest dropping 27 percent as households struggle with current economic conditions. ## Systemic Planning Barriers Westpac CEO Anthony Miller identified the planning system and slow approval processes as major anchors on national growth. He urged the federal government to implement urgent reforms to boost supply. Without faster approval mechanisms, Australia will likely fail to meet its long-term housing targets and struggle to improve overall living standards. ## Future Market Outlook Market experts forecast that home prices will continue to fall until 2028 before stabilizing. The fundamental challenge remains a persistent supply shortage that current government policies have yet to resolve. Future stability depends on balancing capital allocation across competing national priorities while addressing the critical need for more affordable housing supply. ## Sources covering this story - https://www.sbs.com.au/news/article/banks-parliamentary-inquiry-housing-affordability-supply-banking-profits/23yk3vpmm — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._