New mortgages, refinancing centred in capitals: PEXA

Metropolitan Australia has largely experienced a rise in new loans over the March quarter, according to new findings by the digital settlement platform.

The pivot towards regional and rural Australia that was observed over the COVID-19 pandemic could be nearing its end, with new data released by Property Exchange Australia (PEXA) suggesting there was a rise in new loans and refinancing across capital cities over the March 2022 quarter.

According to the digital settlement platform’s latest Mortgage Insights Report, 128,425 new loans were recorded over the three-month period, with Victoria (38,619) reporting the highest quarterly growth in quantity and Western Australia (-4.3 per cent) experiencing the smallest loss experienced by four states reviewed by PEXA.

NSW (-23 per cent) and Queensland (-20.6 per cent) experienced the biggest freefalls over this time frame – a drop said by PEXA as an expected seasonal dip.

However, the report also noted that the top 10 locations for new loans over the March quarter were focused towards greater capital cities, with NSW and Western Australia reporting nine out of their 10 spots being metropolitan, and Victoria noting eight.

Queensland was the only state to see a rise across its greater boundaries, with three of the top 10 new loan locations being situated within Greater Brisbane.

Refinancing, which too saw a seasonal dip quarter-on-quarter but a significant surge over March, was also reportedly centralised in metropolitan Australia, with the top 10 postcodes for refinancing in Victoria, NSW and Western Australia all being within Greater Melbourne, Sydney and Perth.

The findings reflect PEXA data released earlier this month, which reported an increase in settlements across Greater Melbourne, Brisbane and Sydney outperforming regional areas in volume growth.

PEXA Insights’ head of research Mike Gill suggested at the time that, due to a significant lifting of lockdown restrictions across the country, “Australian homebuyers have refocused on the metropolitan regions in Queensland, New South Wales and Victoria”.

According to the same data, this prodigal return to capital cities was accompanied by non-major banks continuing to dominate new loans and refinancing.

As per PEXA, non-major banks were again preferred over the March quarter in Queensland and Western Australia, while also becoming preferred for Victoria.

The big four are currently on equal level with the non-majors, with the majors dropping as least preferred over the quarter before spiking over February and March.

For refinancing however, non-majors surged in popularity over the quarter to be the distinctive first choice for all four states.

According to Mr Gill, this trend was driven by the “major banks increasing fixed loan rates in expectation of interest rate rises, together with non-majors competing strongly on variable loans”.

“We suspect borrowers were also attracted to non-major lenders, with many, as widely reported, offering quicker approval times and increased likelihood of loan approval,” he added.

From Mortgage Business

Disclaimer: Please read

View

These articles provide you with factual information only, and are not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser. The information in these articles is believed to be reliable at the time of distribution, but EFS does not warrant its completeness or accuracy. Neither EFS nor its related bodies, nor their directors, employees or agents accept any responsibility for loss or liability which may arise from accessing or reliance on any of the information contained in these articles. For information about whether a loan may be suitable for you, call EFS on 02 8041 6746.