Mortgage Insights | Victorian investor sell-off a boon for first-home buyers in 2024

This report provides the latest mortgage trends for Australia’s mainland states of NSW, VIC, QLD, WA and SA, covering more than 95% of all property transactions nationally. It includes new loans arising for the purchase of a property and loans that are refinanced against all residential and commercial properties.  

In this report, property settlements that are funded with a loan are defined as a ‘new loan’, regardless of whether a new or existing loan facility is used. Refinances include the refinancing of loans with a different lender, for example, taking out a new loan with another bank. They exclude the internal refinancing of a loan with the same lender, for example, rolling over an expiring loan to a new credit facility with the same credit provider. 

Key Findings: Calendar Year 2024

• 538,519 new loans were issued in 2024, 11.7% higher compared to new loan volumes in 2023.  
• A total of $362.9 billion was issued in new loans in 2024, up 21.4% from the prior year. This was a new record high. It reflected increasing loan sizes as well as greater loan volumes. 
• Refinancing activity slowed dramatically in 2024, as a total of 372,502 refinances were completed, a decline of 17.6% from the previous year. 2023 had been the strongest year for refinancing volumes in the latest credit cycle, following an unusual spike in new fixed-term mortgages taken out two to three years earlier. 

Seasonal drivers: Dec-24 Qtr 

• New loan volumes in the Dec-24 Qtr were highest in VIC, despite much lower settlement volumes compared to NSW and QLD (see the PEXA Property Insights report). This indicates a stronger increase in first-home buyer activity in VIC compared to other states, since first home buyers are more likely to require a mortgage than other types of buyers. This is probably in response to decelerating home prices in VIC in 2024 (in contrast to rises in other states) and reduced investor interest in Victorian properties, with widespread reports of investors selling up. 
• Although refinance volumes were much lower over the year in CY24, this trend seemed to reverse in the Dec-24 Qtr, suggesting that refinancing activity is once again picking up from the trough in 2023. Even though the December quarter is typically a strong quarter for refinancing activity, the month of December 2024 recorded unusually strong growth (+9.1% y/y) compared to the prior year. 

Mortgage markets diverge across states: Falling house prices and regulatory changes for rental properties a boon for first home buyers in VIC in 2024

• CY24 saw a widening divergence in property markets around Australia, particularly with regard to median prices. Home prices continued to rise strongly in Brisbane, Perth and Adelaide, but were flat on average across Greater Sydney and gently decreased in Melbourne. This meant that Sydney and especially Melbourne showed a small improvement in affordability for first home buyers entering the property market. This has led to a stronger rise in new mortgage volumes in these states, since first home buyers are more likely to require a new mortgage than other types of buyers. Victoria was the only state that did not see the median value of new residential mortgages rise during CY2024, in contrast to all other mainland states.
• In Melbourne, quarterly rental bonds data released by the Department of Families, Fairness and Housing (DFFH) showed that the number of active rental bonds – and therefore the number of rental properties – declined by 24,726 from September 2023 to September 2024. This confirms widespread anecdotal reports of a sharp decline in residential rental properties in VIC, as investors sell off their rental properties (in response to state government tax and regulation changes) to an eager pool of first home buyers.
• In QLD, the number of mortgages sits well below the number of property settlements. This is the flip-side of the structurally higher proportion of sales in QLD that are settled in ‘cash’ and do not require a mortgage. These sales are typically associated with older, existing homeowners trading to another home, from elsewhere in QLD and from other states.
• Mortgage approvals for new loans have increased for owner-occupiers and first home buyers and are decreasing for investors in most states. This is in line with recent PEXA research that confirms that the proportion of settlements without a loan has declined across all eastern seaboard states during 2024.  

538,519 new loans were issued in CY24, a 11.7% increase from CY23 

• Volume of new loans (CY24): 538,519
• In CY24, new loan volumes grew more (+11.8%) than all property settlements (+7.8%), reflecting a declining proportion of cash purchases. 

• Volume of residential new loans (CY24): 516,486 
• Total residential new loans in CY24 converged across the eastern seaboard states, given that VIC historically has a higher share of new settlements with a loan. 
• The higher share of new loan volumes in VIC suggests that more owner-occupiers, especially first home buyers, have benefitted from the recent investor sell-off. 

• Volume of commercial new loans (CY24): 17,073
• Those purchasing commercial property in QLD in CY24 were more likely to take out a loan than in NSW or VIC. 

Median loan values recorded double-digit growth in QLD from the Dec-23 Qtr to the Dec-24 Qtr 

• Housing continued to become increasingly unaffordable in QLD, as median home values and median loan values increased.
• Despite the highest property prices in Greater Sydney, median loan values rose to $800,000. 

Only in Dec-24 Qtr were refinance volumes higher than the same period last year 

• Volume of refinances (CY24): 372,502 
• In the Dec-24 Qtr, most major banks pre-emptively cut rates for their fixed-rates home loan products. This could potentially have spurred on more refinancing activity.  

In CY24, $215.4 billion of property was refinanced across the five mainland states 

For further enquiries about this report or other property and mortgage insights, please contact us at research@pexa.com.au. 

For media enquiries, please contact:  

Kate Prigg – Corporate Affairs Manager, PEXA  
E: kate.prigg@pexa.com.au  
M: 0497 595 580  

Copyright 

© 2024 PEXA. PEXA and its licensors own all rights (including copyright) in this document. No content may be copied, modified, published or distributed to any other party with PEXA’s prior written permission. All Rights Reserved. 

PEXA Disclaimers 

This document is general in nature. It doesn’t constitute advice, doesn’t take into account your circumstances, and shouldn’t be relied upon. Please seek professional advice where appropriate. All information is provided “as is” without representation, guarantee or warranty of any kind, whether expressed or implied, including any warranty that the information is accurate, current, reliable, complete, or suitable for any purpose, or any guarantee that any forward-looking statements, including estimates, projections and opinions will be achieved or will prove to be correct. Any estimates, projections and opinions are based on assumptions and events that may be subject to change (without notice). To the full extent permitted by law, PEXA excludes all liability for any loss or damage however arising out of or in connection to this document, including in relation to reliance by you or any third party on the information contained in this document. By accessing and using this document, you acknowledge and agree to the following additional disclaimers that apply to information in the document from PEXA’s licensors. 

South Australia 

WARNING 

The information contained in this dataset is extracted from the records of land status and cadastral boundary definition held by the Government of the State South Australia (the “State”). The information is not represented to be accurate complete, or suitable for any purpose, at the time of its supply by the State, and may have changed since the date of supply by the State. The software by which the information is provided is not represented to be error free. No responsibility is accepted by the State for any reliance placed by any person upon the information, or the software by which it is provided. Persons acquiring or using the information and its associated software must exercise their independent judgement in doing so. 

COPYRIGHT 

Copyright in this information remains with the Crown in right of the State of South Australia. The information is reproduced under licence from the Crown. 

PRIVACY 

The information contained in this dataset must not be used for the purposes of compiling contact lists, whether personalised or not.