Westpac predicts 11% house‑price drop while posting $6.8 bn profit

Westpac, the nation’s second‑biggest lender, warned that interest rates will stay elevated and that house prices could drop more than 10% by March. At the same time, the bank announced a tidy $6.8 billion profit.

The double‑dose of optimism and gloom makes for a head‑scratching moment for market participants. On one hand, the property market is projected to slide into a new normal; on the other, the bank’s earnings show lenders can still thrive even as the housing sector faces headwinds.

Westpac’s comment about rates staying elevated reflects the Reserve Bank’s recent tightening cycle. Investors are now weighing whether to lock in mortgages now or wait for a possible dip in house prices.

The profit figure also raises questions about the gap between the bank’s balance sheet and the broader housing market. Will the projected 11% decline actually materialise, or will it remain a headline that keeps the conversation buzzing?

Either way, the juxtaposition of billions in profit and a bleak housing outlook is a paradox that will keep analysts up at night.