Property and mortgage markets surge ahead as interest rates stabilise

Loan refinancing activity remaining close to record highs

New data released by PEXA today confirms that loan refinancing activity remains close to record highs this month, as more mortgage-holders proactively adjust to the ‘new normal’ of higher interest rates and avoid falling over the ‘mortgage cliff’. This coincides with the Reserve Bank of Australia’s (RBA) Board holding the cash rate steady at 4.10% for the fourth consecutive month today, increasing hopes that this may be the peak in the current rate-rising cycle.

PEXA Chief Economist, Julie Toth, said today’s RBA interest rate pause will be welcome news for current and prospective mortgage holders, who are still in the process of adjusting to previous interest rate rises:

“Australia’s housing markets stabilised in early 2023 and have been recovering since around March, with a gentle lift in prices and sales volumes across most city locations. This recovery is gaining momentum, with prices, listings and sales all gathering pace through September. Today’s extended pause in monetary policy tightening will foster greater confidence in the housing outlook, particularly among the majority of buyers who rely on mortgages to finance their homes,” said Ms Toth.

 “Most pleasingly, the much-hyped threat of a “mortgage cliff” for up to 800,000 fixed-rate borrowers has so far failed to materialise in 2023. PEXA’s latest refinancing data shows Australians continue to refinance their loans at record rates. This is helping to cushion mortgage holders from sharp rate rises and gives them time to adjust their spending to accommodate higher repayments”.

“PEXA’s Refinance Index shows loan refinancing volumes hit a record high in the first week of September, with the Index reaching 212.3 points in the week ending 3 September (seasonally adjusted). The Index has receded only marginally since that peak. As of 3 October, weekly refinancing volumes had fallen only 1.7% from the month earlier and remained 16.7% higher than the same week in 2022. This is more than double the volume of refinancing mortgage-holders, compared to the lowest periods of Australia’s COVID-19 years in April-May 2020 and Feb-March 2021.

“Looking ahead, the RBA continues to warn that further rate rises may be necessary during FY24. Australia’s domestic economy is still exhibiting elevated demand pressures – and inflation risks – across our urban housing markets and in key segments of essential consumer services (such as transport, health services and childcare). International events are continuing to disrupt oil and other commodity prices, with significant flow-on implications for Australian inflation and the Australian dollar. Together with the sizeable differential between Australian and international interest rates, these factors will continue to present a material upside risk to our interest rate outlook,” she said.

-ENDS-

For more information, please contact:

Danielle Tricarico – Head of Corporate Affairs, PEXA
E: Danielle.tricarico@pexa.com.au
M: 0403 688 980

About PEXA

PEXA is a world-leading digital property exchange platform and property insights solutions business, listed on the Australian Stock Exchange and born out of a COAG initiative to digitise the industry. Since 2014, PEXA has facilitated more than 15 million property settlements through the PEXA Exchange in Australia, with 88% market reach in Australia. PEXA has launched refinancing capability in the UK.

The PEXA Group of companies, including .id (Informed Decisions), Value Australia and Land Insight, deliver digital insights and property solutions that help government, financial institutions, banks and property practitioners to unlock the future value of property.