But growth uneven across states
Loan approvals across Australia climbed 15% year-on-year in the March quarter, according to new data from mortgage aggregator Loan Market Group (LMG).
“Our data shows Australians continue their love affair with property, with loan approvals growing 15 percent year-on-year in the March quarter,” said Sam White (pictured above left), LMG executive chairman.
He noted, however, that the growth was not consistent across the country. “Approvals are up 24% in NSW and South Australia, and 21% in Queensland, while Victoria is barely moving at 3% growth,” White said.
The report highlighted a sharp increase in investor activity in NSW and SA, where investor lending rose by 32% and 50%, respectively. In Queensland, owner-occupiers drove growth, with loan approvals in the Sunshine Coast, Far North Queensland, and Brisbane all up by 24% to 25% since the third quarter of 2022.
Meanwhile, Victoria saw a significant pullback. Overall loan approvals in the state are down 8% since Q3 2022. Investor lending in Melbourne’s western suburbs dropped by 43%, underlining the state’s underperformance compared to the rest of the country.
“It continues to be a challenging time for homebuyers in parts of Sydney and Melbourne, where borrowing capacity has been heavily impacted by the rate hiking cycle,” White said. “We’re seeing strong growth in areas where housing is more affordable, and where buyers are getting more value for their loan.”
The figures were drawn from LMG’s network of more than 6,000 brokers, providing a broad, real-time picture of housing finance activity. Mortgage brokers now account for 76% of residential loan origination nationwide.
Barrenjoey banking analyst Jon Mott (pictured centre), who reviewed the report, said Loan Market’s extensive network offers valuable insight into housing trends.
“The first of the interest rate cuts did not stimulate demand, with the data showing approvals fell 4.5% in March,” Mott said. “We expect the RBA will continue a cutting cycle, which will lead to improved borrowing capacity to support a broad-based lift in housing credit.”
As speculation grows around the Reserve Bank’s next move, Treasurer Jim Chalmers has flagged a possible 50-basis-point rate cut as soon as May. However, RBA governor Michele Bullock has cautioned that the outlook for interest rates remains uncertain.
Meanwhile, LMG chief executive David McQueen (pictured above right) observed that investors are becoming more active in regional and coastal areas.
“Investor confidence is growing beyond the capital cities, especially in areas like Perth, coastal Sydney and regional Queensland,” McQueen said. “That kind of activity doesn’t happen unless buyers see long-term upside and rising rental demand.
“Our brokers are telling us they’re working with more clients who are chasing lifestyle and affordability, and they’re not afraid to move for it. Whether it’s regional hubs, outer suburbs or interstate hotspots, people are rewriting the playbook on where they choose to live, invest and raise a family.”
Data from Loan Market also showed a notable rise in median loan sizes in several states. In Queensland, Western Australia and South Australia, loan values have increased from around $400,000–$450,000 to over $580,000–$600,000 since late 2022. Median loan sizes in Victoria, by contrast, have remained steady at just above $500,000.
“The numbers speak for themselves,” McQueen said. “Buyers are redrawing their maps moving beyond the city fringe into regions that were once considered ‘too far’. It’s a direct response to affordability pressure, but also a mindset shift around what home and investment look like.
“The national story doesn’t hold up at a postcode level. What’s booming in one region is flat in the next, and that’s where brokers are playing a critical role. In a fragmented market like this, brokers are critical. They’re the ones helping borrowers understand the trade-offs, navigate tighter lending conditions and get a fairer deal on finance.”
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