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Refinancing and new lending continues to slide

Eden Radford avatar
Eden Radford
- 4 min read
Refinancing and new lending continues to slide

The home loan market cooled in the month of January, with the value of new and refinanced home loans dropping for the second consecutive month.

The latest ABS lending indicator data released today for the month of January, shows the value of refinanced mortgages dropped for the sixth month in a row to $16.07 billion.

While this is significantly higher than pre-COVID levels, it is down a staggering 25 per cent from the peak just six months ago.

Value of loans refinanced in January

Jan-24Monthly changeChange since peak (July 2023)Total since start of hikes (May 22 – Jan 24 inclusive)
$16.07 billion-$853 million
-5.0%
-$5.43 billion

-25.2%

$395.0 billion

Source: ABS lending indicators, seasonally adjusted data.

Value of external refinancing – last 12 months

Value of external refinancing, January 2024

Source: ABS lending indicators, seasonally adjusted data.

New lending continues to fall month-on-month

The value of new home loans recorded its second consecutive drop in January, down $1.02 billion (-3.9%) from the previous month. This comes on the back of an even bigger monthly drop in December of $1.13 billion (-4.1%).

While these drops could be pointing to a market that is finally slowing down, new lending is still well above the levels recorded a year ago, particularly among investor lending which was 18.5 per cent higher in January 2024 than it was in January 2023, despite the five RBA hikes initiated in this time.

Value of new home loans approved in January 2024

ValueMonthly changeYear-on-year change
TOTAL$25.12 billion-$1.02 billion
-3.9%
+$1.96 billion
+8.5%
Owner-occupier$15.91 billion-$770.9 million
-4.6%
+$525.2 million
+3.4%
Investor$9.21 billion-$244.4 million
-2.6%
+$1.44 billion
+18.5%

Source: ABS Lending Indicators Jan 2024, released 7 March 2024, seasonally adjusted data.

First home buyers

The numbers of owner-occupier first home buyers in the market continues to flounder, dropping for the second consecutive month in January.

Number of new owner-occupier first home buyer loans in January

Number of loansMonthly changeYear-on-year change
8,707-648
-6.9%
+364
4.4%

Source: ABS Lending Indicators Jan 2024, released 7 March 2024, seasonally adjusted data.

Fixing continues to lift… at a snail’s pace

The proportion of new and refinanced loans opting for a fixed rate rose again in January – the second consecutive rise.

However, with just 2.3 per cent of new and refinanced loans opting for a fixed rate, in dollar terms, fixing is nowhere near the heights of its popularity in July 2021 when 46 per cent of new and refinanced loans opted for a fixed rate.

Fixed vs variable: proportion of new and refinanced loans

Fixed vs variable, January 2024

Source: ABS Lending Indicators, original data. Based on the value of new and refinanced loans funded in the month.

New loan sizes cool from record highs in December

The average national new owner-occupier mortgage size dropped from its record high in December of $624,383 to $615,178.

The majority of average new loan sizes dropped across the states and territories, with rises recorded in just Victoria, South Australia and Western Australia – the latter two posting new record highs.

This means South Australia’s average new loan size has risen by an astonishing 13.5 per cent, or $62,991, since the start of the rate hikes back in early 2022.

Average new loan sizes - owner-occupier mortgages

Av. new loan sizeMonthly changeChange since hikes

(April 22 – Jan 2024)

Australia$615,178-$9,205
-1.5%
+$4,024
+0.7%
NSW$770,914-$14,491
-1.8%
-$15,121
-1.9%
VIC$614,088+$1,070
+0.2%
-$23,180
-3.6%
QLD$559,507-$12,932
-2.3%
+$32,055
+6.1%
SA$530,276 - record high+$10,798
+2.1%
$62,991
+13.5%
WA$530,298 - record high$21,023
+4.1%
+58,809
+12.5%
TAS$434,889-$27,772
-6.0%
-$12,889
-2.9%
NT$422,143-$15,429
-3.5%
-$4,369
-1.0%
ACT$581,653-$40,551
-6.5%
-$14,668
-2.5%

Source: ABS Lending Indicators Jan 2024, released 7 March 2024, seasonally adjusted data.

Compare home loans in Australia

Product database updated 19 Apr, 2024

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