Digital property settlements platform Property Exchange Australia’s (PEXA) Refinance Insights for the 2021 financial year (FY2021) has revealed that over 11,000 refinances in NSW and 5,000 refinances in Queensland were completed in June 2021.
These volumes are the highest observed in the past two years, according to PEXA.
In Victoria, nearly 11,500 refinances were completed in June 2021, equalling its previous record in June 2020.
This is significant because the high refinance levels experienced in June 2020 were likely driven by the double interest rate cut in March 2020 triggered by the onset of the coronavirus pandemic, whereas no further rate cuts have been announced so far in 2021.
According to the PEXA insights, the high refinance volumes may have also been driven by the likelihood of rising interest rates as early as late 2022 due to the strong economic recovery and property owners pursuing better rates on their home loans.
Refinances rose at the fastest rate in NSW year-on-year (15.2 per cent) at 101,203 in FY21, while Victoria retained the top spot for the most refinances over the past two financial years (up 3.6 per cent year-on-year at 106,048).
In Queensland, refinance volumes grew by 12.4 per cent year-on-year to 48,768. This was less than half of that observed in NSW and Victoria, which PEXA said could point to potential growth opportunities in Queensland.
PEXA’s insights have also revealed that the major banks lost their leading position for refinances in the December 2020 quarter across all eastern states.
In the calendar year 2021 so far, the major banks have been level with non-major banks in NSW and Victoria, while non-major banks nudged ahead into a slight lead in Queensland.
Prior to March 2020 before the onset of COVID-19 in Australia, the non-major banks held a dominant position for net refinance gain in mainland eastern states.
However, following the national lockdown, the major banks began moving to a strong positive position.
This was lost moving into the December 2020 quarter, with non-major banks edging ahead through the second half of FY2021, according to PEXA.
[Related: NSW, Qld record yearly spike in refinancing]
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.