AdvertisementThe rise in mortgage rates, the federal budget’s changes to negative gearing and capital gains tax, and deteriorating consumer sentiment have combined to drive the housing market into a synchronised correction, led by Sydney and Melbourne. NAB said that customers are increasingly focused on budget repair, cutting discretionary spending and delaying major financial decisions. AdvertisementWestpac reported a steep fall in new mortgage applications, dropping 11% across the June quarter and 20% since the Albanese government unveiled its changes to property investor taxes. Given that mortgages make up 60–70% of major bank loan books, the sustained downturn in mortgage demand will hit profitability and valuations. AdvertisementThe 30-year housing and mortgage supercycle that turbo-charged bank profits appears to be over.