Australians following the housing market have had plenty of numbers to digest recently, from weaker demand for new mortgages to forecasts of falling house prices.
But Commonwealth Bank Chief Financial Officer Alan Docherty says it’s important to put those figures in perspective.
Speaking to CommSec’s Gillian Bowen following CBA’s full-year results announcement, Docherty said mortgage applications had fallen by around 15 per cent over the previous 12 weeks and were about 17 per cent lower than a year earlier. The slowdown came amid three successive interest rate rises at the start of 2026 and changes to capital gains tax and negative gearing in the May Budget.
Despite those declines, he said that would still translate into housing credit growth of around 4 per cent to 5 per cent over the next 12 months.
“Historically, that is a robust level of housing credit growth,” Docherty said.
On house prices, Docherty said forecasts ranged from modest falls to declines of around 10 per cent. But Australian house prices had risen by about 70 per cent over the previous six years, he said.
A 10 per cent fall would take prices back to around January 2025 levels, Docherty said during the interview, which was recorded as part of CommSec’s Executive Series of conversations with Australian business leaders.
Higher rates are changing how households spend
CommBank’s view across millions of customer accounts also shows the pressure higher interest rates are putting on households with mortgages, Docherty said.
Australia is particularly sensitive to changes in interest rates because a large proportion of home loans have variable rates, meaning changes can flow through relatively quickly to household budgets.
CommBank data showed spending by customers without a mortgage had increased by around 25 per cent over the past five years, broadly in line with inflation.
But for customers with a mortgage, spending had risen by around 15 per cent over the same period.
Docherty said the difference showed the extent to which mortgage holders had been tightening their belts.
Spending was still growing overall, he said, but not as quickly as prices, reducing households’ purchasing power.
What’s supporting the Australian economy?
Looking further ahead, Docherty said Australia’s growing population was an important source of confidence in the economic outlook.
“The thing that gives me the most confidence about the Australian economy is demographics,” he said, pointing to migration, population growth and the infrastructure investment needed to support a larger population as important foundations for the economy.
That population growth is also showing up in spending patterns.
Docherty pointed to cafes and restaurants as an example. While spending per customer had been falling, the number of customers had been increasing as the population grew, helping many businesses maintain their overall performance.
