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New loan volumes down 17%: Report

Borrowing activity declined during the March quarter, new research has found.

Digital property exchange platform PEXA’s latest Mortgage Insights Report for the March quarter 2024 has revealed a decrease in new loan volumes of 17.1 per cent on the December quarter of 2023.

In total, 113,336 new loans were issued in the March quarter of 2024, with 108,751 new loans being residential.

While this represents a quarterly drop, it was an improvement year on year, showing an increase of 8.9 per cent.

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State by state, Queensland ranked first out of the mainland states with 29,831 new residential loans for the quarter.

Victoria and NSW followed in second and third place with 28,372 and 27,150 new residential loans, respectively.

Meanwhile, Western Australia recorded the smallest decline on the December quarter of 2023 of 5.8 per cent and the largest year-on-year increase of 14.1 per cent.

The median value on residential loans rose across the eastern states largely driven by capital cities in Victoria and Queensland, according to the report.

Median loan values in Queensland increased by 13.5 per cent over the last 12 months to $554,915 in the Greater Brisbane area, while regional Queensland recorded an increase in median loan values of 8.9 per cent (up to $448,510).

Growth in median loan values across regional NSW rose by 5.4 per cent, outperforming Greater Sydney’s relatively flat reading of 0.5 per cent since the December quarter.

Similarly, the most recent Lending Indicators data released by the Australian Bureau of Statistics (ABS) revealed a yearly increase of 17.9 per cent in new housing lending values since March 2023, up to $27.6 billion.

According to PEXA, one of the macro-economic drivers of new loan volumes and values was property sales during this quarter.

As interest rates rose and the property market cooled, new loan activity slowed during 2023; however, a strong underlying demand for homes and home loans saw the market continue its upward swing relatively quickly, regardless of tightening credit conditions and higher interest rates.

PEXA predicted that the number of new mortgage holders is likely to nudge higher (relative to 2023) should interest rates remain stable over the remainder of 2024.

Refinancing continues to slow

Further findings from PEXA’s report found that a total of 81,614 refinances were completed during the March quarter, marking a considerable slowdown from the September quarter of 2023 peak.

Refinancing activity declined both quarterly and annually as of the March quarter, down by 16.4 per cent on December 2023 and 23.4 per cent on the same period last year.

Values also fell quarterly and yearly, down by 15.9 per cent to a total of $45 billion worth of property being refinanced nationally in the March quarter of 2024 and 7.8 per cent year on year.

Victoria retained the top spot for highest refinancing volumes, with 24,952 recorded during this period, although the report noted that volumes in the state are also contracting the sharpest, falling by 29 per cent relative to the previous quarter, and down 20.2 per cent annually.

In terms of refinancing values, NSW nabbed the top spot for this category at $17.4 billion that reflected higher loan values and property prices, according to PEXA.

[RELATED: Home loan values record strong yearly growth: ABS]

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