Westpac posts A$6.8 billion profit and tips a 10.9% house price fall as Australian home values drop for a seventh straight month before RBA decision
Westpac's profit slipped 1% to A$6.8 billion, and it expects house prices to fall 10.9% by March 2027. National home values fell 1.2% in October.
At a glance
- Westpac's profit for the year to September was A$6.8 billion, down 1%. Cash profit of A$7.0 billion was slightly above analysts' A$6.96 billion estimate.
- The bank expects house prices to fall 10.9% between March 2026 and March 2027. Its own economists say a fall of that size would be the largest since national records began in 1980.
- Cotality's index showed national home values down 1.2% in October, the seventh monthly fall in a row.
- The Reserve Bank of Australia decides on rates on Tuesday, and markets widely expect a fifth rise this year. Westpac forecasts a 4.85% cash rate held until mid-2027.
Westpac reported a full-year profit of A$6.8 billion on Monday, November 2, 2026, down 1% on the previous year, and warned that Australian house prices will fall by 10.9% between March 2026 and March 2027. The numbers came on the day new data showed home values dropping for a seventh straight month, and one day before the Reserve Bank of Australia is widely expected to raise rates again.
The country's oldest bank said the economy was holding up thanks to strong business investment, but that prices for goods and services remained above the RBA's target and that strain on households and businesses was uneven.
Westpac's numbers against last year and forecasts
| Year to September 2026 | Result |
|---|---|
| Statutory profit | A$6.8 billion, down 1% |
| Cash profit, excluding one-offs | A$7.0 billion |
| Analyst consensus for cash profit | A$6.96 billion |
| Final dividend | 77 cents a share |
| Full-year dividend | A$1.54, up 1% |
| House price forecast, March 2026 to March 2027 | Down 10.9% |
The result was slightly ahead of what analysts expected, but it was not one to excite the market. The dividend rise was just 1%, and the bank's message about the year ahead was cautious.
A fall bigger than anything since 1980
The house price forecast is the part most Australians will notice. Westpac's economists said in their October outlook that a peak-to-trough fall of just over 10% would be the largest since national price measures began in 1980, although falls adjusted for inflation were steeper during earlier recessions. As recently as September, the bank was forecasting 7.3%.
Cotality's home value index showed the downturn still gathering pace. National values fell 1.2% in October, the seventh monthly decline in a row, and analysts are now describing it as the sharpest fall in capital city prices in about 40 years.
| City | Westpac forecast fall in 2026 |
|---|---|
| Sydney | 12% |
| Melbourne | 8% |
| Brisbane | 4% |
| Perth | 2% |
| Adelaide | 2% |
Westpac blamed rising borrowing costs and changes to housing tax rules in the federal budget. Matthew Hassan, its head of Australian macro-forecasting, wrote that the risk of trading drying up and prices dropping more sharply was now "crystallising", with turnover already down 20%.
What it means for borrowers, buyers and renters
Mortgage holders face the most immediate pressure. Markets widely expect Tuesday's decision to produce the fifth rate rise of the year. Westpac forecasts the cash rate reaching 4.85% and staying there until mid-2027, and it does not expect cuts until August next year. The bank's chief economist, Luci Ellis, wrote that the RBA would want clear evidence of inflation coming down before easing.
First-home buyers get lower prices but also smaller borrowing capacity, since higher rates cut how much a bank will lend. Falling prices do not automatically mean a cheaper monthly repayment.
Recent buyers and investors with small deposits are most at risk of owing more than their homes are worth if they have to sell. Westpac flagged people aged 35 to 54 as particularly exposed because of their high debt levels.
Consumers already feel it. The Westpac-Melbourne Institute sentiment index fell 4.7% to 80.4 in October, among its weakest readings since the survey began in the early 1970s. Westpac forecasts economic growth of 1.5% through 2026.
The RBA's decision is due on Tuesday, November 3, the same day as the Melbourne Cup. The bank's statement should show how far policymakers think they still need to go.
Questions people are asking
How much will house prices fall in Australia according to Westpac?
Westpac expects a 10.9% fall from March 2026 to March 2027. Its economists also expect Sydney to fall the most in 2026, at about 12%.
Will the RBA raise interest rates in November 2026?
The decision comes on Tuesday, November 3. Markets widely expect a rise, which would be the fifth this year, and Westpac forecasts the cash rate reaching 4.85%.
