Refinancing slows before rebounding late in the year
![New loan volumes reach record high in 2024](https://cdn-res.keymedia.com/cdn-cgi/image/w=1000,h=600,f=auto/https://cdn-res.keymedia.com/cms/images/us/075/0357_638737726129122800.png)
New loan activity surged in Australia last year, with 538,519 new loans issued in 2024, an 11.7% increase from 2023, according to new data from PEXA Group.
The total value of new loans also reached a record $362.9 billion, up 21.4% year over year, reflecting both higher loan amounts and greater borrowing activity.
Refinancing, however, slowed significantly, with 372,502 refinances completed in 2024 — a 17.6% drop from the prior year. PEXA attributed the decline to a return to normal levels after an unusual refinancing boom in 2023, driven by fixed-term mortgages taken out two to three years earlier.
State-by-state trends
Victoria saw the highest volume of new loans in the December 2024 quarter, despite having lower settlement volumes than New South Wales and Queensland. The PEXA data indicates a stronger first-home buyer presence in Victoria, as this group is more likely to require mortgage financing.
The trend coincided with falling home prices in Melbourne and a reported sell-off by investors, which Julie Toth (pictured above), chief economist for PEXA Group, noted could have created opportunities for first-home buyers.
“Victoria was the only state that did not see the median value of new residential mortgages rise during 2024, in contrast to all other mainland states,” Toth said.
In Queensland, the number of new mortgages remained significantly below settlement volumes, reflecting the state’s higher proportion of cash purchases. These transactions were largely driven by older homeowners relocating within the state or from interstate.
Refinancing rebounds late in the year
While refinancing declined overall in 2024, PEXA’s data suggests that activity began to pick up in the December quarter. December alone saw a 9.1% year-over-year increase in refinances.
“Most major banks preemptively cut rates for their fixed rate home loan products in the December quarter, which could potentially have spurred on more refinancing activity,” Toth said.
Diverging property markets
The Australian housing market showed increasing divergence in 2024. Home values continued to rise sharply in Brisbane, Perth, and Adelaide, while Sydney prices remained flat, and Melbourne saw slight declines. These shifts led to a modest improvement in affordability for first-home buyers in Sydney and Melbourne.
In Victoria, rental market data from the Department of Families, Fairness and Housing showed a decline of 24,726 rental bonds from September 2023 to September 2024, confirming reports of landlords exiting the market. Investor withdrawals were largely attributed to state tax and regulatory changes.
Meanwhile, Queensland’s housing affordability worsened as both median home values and mortgage sizes increased. Despite Sydney’s high property prices, median loan values in the city rose to $800,000.
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