Westpac Banking Corp, Australia’s second-largest lender, said mortgage applications have fallen 20% as the Labor government’s tax changes and higher interest rates weaken housing demand. The bank expects total housing credit growth to slow to 4.7% in 2027 from 6.8% this year, before edging up to 5.2% in 2028 as owner-occupied borrowing improves slightly. Investor housing credit is forecast to slow more sharply, dropping from 9.1% this year to 4.5% in 2027 and 4.4% in 2028, according to a bank presentation. The slowdown matters for Australia’s largest banks because they control more than 70% of the national mortgage market and rely on home lending as a major profit driver. Westpac also reported cash earnings of A$1.8 billion for the quarter ended June 30, down from A$1.9 billion a year earlier, while saying its core net interest margin was broadly stable and its lending and deposit books each rose 2%.