Australian Banks: Tax matters: Lessons on house prices and credit growth from across the ditch

Research evidence excerpt

Australian Banks: Tax matters: Lessons on house prices and credit growth from across the ditch

J P M O R G A N Asia Pacific Equity Research

30 June 2026

Australian Banks

Tax matters: Lessons on house prices and credit growth

from across the ditch

The Australian housing market is facing a period of stress, with recent proposed Australia

changes to investor tax policies set against a backdrop of unaffordable housing

markets across most of the country. In this note, we look at the NZ experience over the

last 5 years, which has seen changes to tax policies, rising interest rates, additional Andrew Triggs AC

housing supply, and slower immigration drive a 17% reduction in nominal property (61-2) 9003-8919

andrew.triggs@jpmorgan.com

prices and ~30+% reduction in real prices. While tempting to blame tax changes

Kelsey Bentley

alone, rising supply has been a key driver, with a higher rental vacancy rate driving (61-2) 9003 7482

a soggy recovery in prices. With Australian house price declines likely, we have kelsey.bentley@jpmorgan.com

already factored in a reduction in the average major bank Australian housing loan J.P. Morgan Securities Australia Limited

growth to ~4% in FY27/28, while we see a pickup in NZ to 5%-6%. Negative wealth

effects can’t be ruled out, which would deepen major bank share price

underperformance. The NZ experience of lower house prices, a pickup in first home Figure 1: NZ house value to income multiple

buyer demand to ~35% of new loans, and improved affordability suggest the 9

adjustment may be worth the pain. Our preferred large cap names (MQG and ANZ, 8

both OW) have less exposure to Australian housing, while CBA and WBC (both UW) 76

are more exposed and lack valuation support. 5

• Uncertainty in Aus housing post Budget. Uncertainty from the Federal 32