NSW, Qld record yearly spike in refinancing

Digital property settlements platform Property Exchange Australia (PEXA) has released its July 2021 settlement and mortgage insights, which has revealed that refinances were 10.4 per cent above June 2020 levels in June 2021 in NSW, and 5.0 per cent above June 2020 levels in Queensland.

PEXA noted that this surge is significant because the high June 2020 refinance levels were driven by the double official cash rate cut in March 2020 (including the emergency cash rate cut) during the onset of the COVID-19 crisis.

Month-on-month, refinances were up 19.1 per cent in NSW and 20.5 per cent in Queensland in June 2021.

Refinance settlements rose by 23.1 per cent month-on-month in Victoria in June 2021, but were 0.6 per cent lower than June 2020, reflecting the “remarkably” high June 2020 levels driven by the double interest rate cut in March 2020, according to PEXA.

However, refinance levels are forecast to fall by 5.5 per cent in NSW in July 2021 (which would still be 26.0 per cent above last year), and by 7.0 per cent in Queensland and Victoria (which would still be 22.1 per cent and 14.5 per cent respectively above last year).

Sale settlements increase across states

NSW sale settlements increased by 5.4 per cent in June 2021, and were 56.5 per cent above June 2020. It is forecast to rise by 3.9 per cent in July 2021, which would be 50.1 per cent above July 2020.

Residential settlements jumped by 3.4 per cent month-on-month and 64.2 per cent year-on-year, while commercial settlements rose by 18.1 per cent month-on-month and 24.0 per cent year-on-year.

Sale settlements’ aggregate value rose by 94.4 per cent compared to last year from $12.0 billion to $23.0 billion, and represented a 9.8 per cent month-on-month increase in June 2021.

Settlements in Greater Sydney were up 1.0 per cent month-on-month in June 2021 and 48.7 per cent year-on-year, while the rest of NSW was up 12.2 per cent month-on-month and 68.7 per cent compared to last year.

Sale settlements with a new loan were up 4.5 per cent in June 2021, and 58.0 per cent above last year in NSW, with residential settlements up 4.0 per cent month-on-month (up 65.6 per cent year-on-year) and commercial settlements up 9.4 per cent month-on-month (up 15.9 per cent year-on-year).

New loan settlements rose by 0.2 per cent month-on-month and 53.0 per cent year-on-year in Greater Sydney, while the rest of NSW saw a 13.1 per cent month-on-month jump (up 67.6 per cent compared to June 2020).

The major banks have remained positive for new loans overall but declined by 3 per cent in their net new mortgages while non-major banks continued to a recovering trend from the negative position in December 2020, PEXA said.

In Queensland, sale settlements were up 13.1 per cent in June 2021 (81.9 per cent above June 2020). No growth is forecast for July 2021, but this would still be 48.8 per cent above July 2020.

Residential settlements climbed 10.5 per cent month-on-month and 94.5 per cent year-on-year, while commercial settlements were up 25.9 per cent month-on-month and 42.7 per cent year-on-year.

Settlements in Greater Brisbane were up 15.9 per cent month-on-month and 68.6 per cent year-on-year, while in the rest of Queensland, they were up 11.0 per cent month-on-month and 95.4 per cent compared to last year.

The aggregate value of sale settlements rose by 15.8 per cent month-on-month and 135.8 per cent on June 2020, from $6.0 billion to $13.0 billion.

Sale settlements with a new loan rose by 12.5 per cent in June 2021 and 75.5 per cent above June 2020, with residential settlements up 10.4 per cent month-on-month and 85.4 per cent year-on-year, while commercial settlements were up 23.4 per cent month-on-month and 39.9 per cent year-on-year.

New loan settlements in Greater Brisbane were up 15.7 per cent month-on-month and 63.9 per cent year-on-year, while in the rest of Queensland, they were up 9.5 per cent month-on-month and 89.8 per cent compared to last year.

Major banks reduced their negative net position by 39.6 per cent for new mortgages but remained low compared to 12 months prior, while non-major banks declined by 33.8 per cent in their net positive position but continued to trend at levels well above the majors, PEXA said.

In Victoria, sale settlements were up 14.1 per cent in June 2021, 51.8 per cent above June 2020, with growth forecasts of 2.5 per cent in July 2021.

Residential settlements increased by 14.2 per cent month-on-month and 69.8 per cent year-on-year, while commercial settlements were up 14.0 per cent month-on-month and 15.8 per cent year-on-year.

In Greater Melbourne, settlements were up 17.8 per cent month-on-month (compared to 7.0 per cent month-on-month in the rest of Victoria), and 51.0 per cent year-on-year (compared to 60.7 per cent in the rest of the state).

The aggregate value rose 22.3 per cent month-on-month and 81.2 per cent year-on-year from $10.0 billion to $18.0 billion.

Sale settlements with a new loan spiked by 13.5 per cent in June 2021 and 60.1 per cent above last year, with the residential segment up 13.6 per cent month-on-month and 77.5 per cent year-on-year, and the commercial segment up 13.4 per cent month-on-month and 20.0 per cent year-on-year.

Greater Melbourne recorded a 16.3 per cent month-on-month rise and a 61.4 per cent year-on-year increase, while in the rest of Victoria, settlements with a new loan rose by 6.7 per cent month-on-month and 66.5 per cent compared to June 2020.

Total sales settlements include those with and without a loan, while new loans include only those funded with a loan. Around 70.0 per cent of sale settlements are funded with a loan.

Major banks grew by 16.6 per cent in their net position for new mortgages in Victoria, remaining in the leading position they have held for over 12 months, while non-major banks grew their net positive position but their overall trend remains flat, according to PEXA.

[Related: Qld races ahead in property settlements: PEXA]