Mortgage Insights | New loans continue to grow but refinancing wave abates in FY24

This report provides the latest mortgage trends for the mainland states of NSW, VIC, QLD, WA and SA including new loans arising for the purchase of a property and property refinances. Loan data in this report include mortgages raised against all residential and commercial properties unless otherwise stated.  

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.

• A total of 509,955 new loans were issued in FY24, an increase of 6.0% compared to FY23.
• New loan volumes were highest in VIC in FY24 (136,461), despite more property transactions being settled in QLD and NSW in FY24 (see PEXA Property Insights FY24). 
• 396,653 refinances were completed in FY24, a 11.9% decline compared to FY23. This amounted to $211.2 billion worth of property-related loans being refinanced in FY24. 

• Trends in new loan volumes move in line with trends in property settlements. 141,872 new loans were issued in the Jun-24 Qtr, an increase of 25.1% from the prior quarter. This was driven by NSW and VIC, who were up by 35.8% and 23.8% respectively compared to the previous quarter.
• Growth in the Jun-24 Qtr can be attributed to a weaker than usual Mar-24 Qtr, due to the earlier than usual Easter holidays, which fell earlier in the month of March. Buyers have likely delayed settlements to April as a result. As such, new loan volumes in the month of April were 32.3% higher compared to the previous year.  
• The month of June 2024 is typically one of the strongest months for property settlements in any given year. New loan volumes in June 2024 were weaker compared to May but was flat compared to June 2023, despite fewer business days in June 2024. 

• The Australian economy slowed markedly through FY24. Real GDP grew by only 0.1% q/q and 1.1% y/y in the March quarter of 2024, weighed down by falling real GDP and incomes per capita (-1.3% y/y and -2.8% y/y respectively), ongoing inflation pressures, higher interest rates and stagnant household consumption (just +0.1%  y/y to March). More positively however, the labour market remains robust, with resilient jobs growth and historically low unemployment, as businesses continue to grow and invest. 
• Looking ahead to FY25, growth in household consumption and investment is expected to improve in response to income tax cuts, receding inflation and real incomes growth.
• FY24 saw interest rates rise rapidly, even as average household incomes stagnated (and went backwards, in real terms). As a result, average principal-plus-interest repayments as a share of household disposable incomes moved to recent highs (but remained lower than the record-high levels seen in 2010-11 during the post-GFC period). Despite this, most borrowers are still able to service their mortgages. Mortgage arrears rates have ticked up slightly but remain low nationally, and low levels of distressed sales are evident. 
• New loan volumes growth has therefore been subdued, as home buyers are constrained by higher loan serviceability costs – and in some cases, by a reduced maximum loan size. 
• For refinances, most of the pandemic era low fixed-rate loans had a tenure of just two to three years and expired during FY23. This meant that FY24 saw an end to the glut of refinancing activity attributed to fixed-rate loan expiry. 

VIC had the highest volume of new loans in FY24 despite having fewer property transactions than NSW or QLD

• Volume of new loans (FY24): 509,955
• Across the five mainland states, total new loans grew by 6.0% from FY23, in line with the recovery in sale settlement volumes. 

• Volume of residential new loans (FY24): 489,386
• VIC ranked first in the nation, with 130,997 new loans, followed by NSW (129,729) and QLD (129,719). 
• A higher proportion of home buyers in VIC in FY24 have taken out a mortgage to finance their purchase in FY24, compared to the other large eastern states.

• Volume of commercial new loans (FY24): 15,840
• The commercial property sector has not matched the recovery seen in the residential property sector in FY24. 

The median loan value for a property in Greater Sydney exceeded $760,000 in the Jun-24 Qtr

• Median loan values fell in both regional VIC (-1.7%) and Greater Melbourne (-4.5%) in the Jun-24 Qtr compared to the Mar-24 Qtr but recorded positive year-on-year growth (4.9% and 4.6% respectively).
• QLD had the strongest growth in median loan values, which grew by 17.5% in Greater Brisbane and 10.1% in regional QLD.

National refinancing activity in FY24 has moderated to levels last seen in FY22 
 

• VIC recorded the highest volume of refinances (125,082), followed by NSW (120,679), which had the second highest refinance volume.

A total of $211.2 billion was refinanced through the PEXA Exchange in FY24 

• The aggregate value of refinances reflects differences in house prices and loan values across the different 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 

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