Mortgage Insights | Uplift in new loan volumes in the Sep-24 Qtr

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. 

Key Findings: Sep-24 Qtr 

• A total of 137,186 new loans were issued in Sep-24 Qtr, a 16.2 per cent increase from the same quarter of the prior year. The vast majority of these loans (over 96%) were for residential properties.
• Growth in new residential loans was highest in QLD, with 36,078 new loans (up 19.7% y/y), followed by SA, with 8,174 new loans (up 17.3% y/y).
• 4,387 new commercial loans were recorded across NSW, VIC and QLD, up 15.2% from the Sep-23 Qtr.
• After experiencing a low in refinancing activity in the Mar-24 Qtr, refinance volumes continued to recover in the Sep-24 Qtr, with 97,817 refinances completed via the PEXA Exchange nationally. 

Seasonal drivers: Sep-24 Qtr 

• Historically, the September quarters tend to perform at a lower volume than other quarters  since it follows the end of the financial year, where there is typically a surge in settlements. This seasonal pattern is more pronounced in every state other than QLD, which tends to have a smoother quarter-to-quarter settlement pattern.
• The volume of new loans typically moves in line with property settlement volumes. However, new loan volumes have made up an increasing share of the market in recent quarters, as ‘cash purchases’ (property settlements with no mortgage attached to the sale) continue to decline. 

Macroeconomic drivers: economy and incomes slowly improving in the second half of 2024  

• The Australian economy grew very modestly in the first half of 2024, with real GDP by just 0.2% in the June-24 Qtr, and by 1.5% over FY24. However, GDP per capita had fallen for a sixth consecutive quarter, and was down by 1.0% y/y. Growth is estimated to have picked up pace in the Sep-24 Qtr, with household incomes, consumption and housing investment supported by income tax cuts from 1 July, together with the benefits of receding inflation and a resilient labour market.
• The Australian Bureau of Statistics (ABS) reported that new lending investors outpaced owner-occupiers over the 12 months to August 2024, growing by 34.2%, and 16.8% respectively, albeit with considerable variation across states (notably lower in Victoria, which historically has a high proportion of settlements with loans).
• Some financial institutions, anticipating and pre-empting rate cuts in FY25, are cutting fixed mortgage rates for new customers, but relatively few are opting for fixed rates as yet. 
• Consumer sentiment is tentatively improving in response to better conditions, but debt-related sentiment remains highly cautious. The Westpac-MI monthly survey indicated an improvement in September in attitudes around ‘time to buy a dwelling’ and ‘interest rate expectations’, but both measures remained in ‘net negative’ territory and well below their long-term average. Over half of consumers still expected interest rates to rise over the coming year (down from two thirds in July) and half nominated bank deposits or paying down debt as the best place to invest, with only 10% nominating real estate. This correlates with preliminary spending data that indicate that the income tax cuts since 1 July are mainly being utilised to pay off debt, rather than to take on new debts and large new commitments.  

A total of 137,186 were issued in Sep-24 Qtr, a 16.2 per cent increase from the prior year

• New loan volumes were highest in QLD (37,797), followed by NSW (36,530). 
• The proportion of settlements with a loan is highest in WA and VIC and lowest in NSW and QLD. 

• QLD not only recorded the highest volume of residential new loans, but also had the strongest growth compared to the Sep-23 Qtr (19.7%). 
• NSW and SA also performed well, where growth in residential new loans was 17.2% and 17.3% respectively.  

• 4,387 new commercial loans were recorded across NSW, VIC and QLD. 

Median loan values remained relatively flat, aside from QLD

• Higher interest rates and stricter lending criteria has kept the median loan value fairly stable. However, this isn’t the case in QLD, where the median amount borrowed increased by 17.1% in Greater Brisbane and 13.9% in regional Queensland. 

National refinancing activity continues to pick up after slumping in recent quarters

A total of $55.5 billion was refinanced through the PEXA Exchange in the Sep-24 Qtr

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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South Australia 

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