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Refinancing stabilises as home lending continues to climb

Eden Radford avatar
Eden Radford
- 5 min read
Refinancing stabilises as home lending continues to climb

The value of refinanced mortgages rose slightly in the month of November, lifting by a modest $121 million – the first increase in four months.

Nevertheless, the latest ABS lending indicator data for November, released today, shows the value of refinanced loans is down by almost $4.1 billion compared to the peak in July 2023.

Since the start of the hikes, $361.90 billion worth of mortgages have been refinanced in 19 months (May 22 – November 23) from a total of 704,843 loans (includes loans that may have refinanced more than once).

While the refinancing boom is well and truly past the peak, refinancing activity is still relatively strong. Three years ago in November 2020, the total value of refinanced loans was just $10.43 billion.

Total value of refinancing – November 2023

Nov-23Monthly changeYear-on-year change
$17.49 billion$121 million

0.7%

-$2.37 billion

-12%

Source: ABS Lending Indicators November 2023, released 12 January 2024, seasonally adjusted data.

Value of mortgages refinanced per month – last three years

24.01.12 value of mortgages refinanced

Source: ABS Lending Indicators November 2023, released 12 January 2024, seasonally adjusted data.

New home lending continues to rise, albeit at a slower pace

The value of new owner-occupier and investor lending increased again in November, driven primarily this month by investors.

The value of investor lending rose 1.9 per cent compared to the previous month, posting its ninth consecutive rise.

Owner-occupier lending rose by a more subdued 0.5 per cent, its fourth consecutive rise.

These modest increases come on the back of big rises in October where owner-occupier new loans rose by a massive 8.3 per cent (revised), while investors rose by a revised 4.9 per cent.

Value of new home loans approved in November

ValueMonthly changeYear-on-year change
Total$27.58 billion+$263 million

+1.0%

+$3.20 billion

+13.1%

Owner-occupier$17.86 billion+$83 million

+0.5%

+$1.72 billion

+10.6%

Investor$9.72 billion+$180 million

+1.9%

+$1.48 billion

+18%

Source: ABS Lending Indicators November 2023, released 12 January 2024, seasonally adjusted data.

Average new loan sizes hit new record highs in three states

The average new loan size again hit new record highs in Queensland, South Australia and Western Australia, however average new loan sizes dropped this month in NSW, Victoria, Tasmania, the Northern Territory and the ACT.

Average new loan sizes

Average new loan sizeMonthly changeYear-on-year change
National$608,448-0.3%1.1%
NSW$754,832-1.0%0.3%
VIC$602,471-1.0%-2.6%
QLD$557,510 - record high1.7%4.7%
SA$510,057 - record high0.6%6.4%
WA$497,275 - record high0.2%3.9%
Tas$444,726-2.7%-3.1%
NT$429,333-1.3%-2.5%
ACT$598,643-0.6%-6.0%

Source: ABS Lending Indicators November 2023, released 12 January 2024, seasonally adjusted data.

First home buyers continue their slow comeback

The number of owner-occupier first home buyers rose again in the month of November, with 10,395 new loans settled.

While this is the fourth consecutive month first home buyer numbers have increased, the total number of first home buyer loans is still 36 per cent below the recent peak in January 2021 when 16,256 loans were settled.

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

AmountMonthly changeYear-on-year change
Number of loans10,395+354

+3.5%

+1,753

+20.3%

Source: ABS Lending Indicators November 2023, released 12 January 2024, seasonally adjusted data.

Owner-occupier first home buyers

Number of new loan commitments – last four years

24.01.12 Number of new loan commitments

Source: ABS Lending Indicators, seasonally adjusted data.

Fixing drops to one of the lowest levels on record

The proportion of new and refinanced loans opting for a fixed rate dropped to yet another recent low at just 1.98 per cent – the lowest level in the latest ABS lending indicator records.

Fixed vs variable: proportion of new and refinanced loans

24.01.12 Fixed vs variable

Source: ABS Lending Indicators, original data.

RateCity.com.au research director, Sally Tindall, said: “Refinancing largely stabilised in November after three months of steep declines.”

“While we’re now well past the peak in refinancing, the value of mortgages switching each month is still at elevated levels,” she said.

“Rock bottom rates in 2021 might have shone a spotlight on refinancing, but the rising cash rate has been the blowtorch that’s spurred many borrowers into action.

“The latest ABS data shows over 700,000 mortgages have refinanced since the start of the rate hikes, switching more than $360 billion worth of loans.

“Refinancing could well drop further in the first half of 2024, however, if we do see cash rate cuts later in the year it could be game on for some borrowers ready for their next move.

“It’s fantastic to see first home buyer numbers rising again in the month of November, despite rising rates and property prices.

“These numbers are likely to lift further in 2024, particularly when the government’s much touted Help to Buy scheme finally gets up and running.

“While this scheme will help lower-income first home buyers on to the property ladder without having to shackle themselves to super-sized debts, the places in this scheme are set to be capped at just 10,000 per year, which is unlikely to be enough to cater for the potential demand,” she said.

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Product database updated 14 Jul, 2024

This article was reviewed by Research Director Sally Tindall before it was published as part of RateCity's Fact Check process.

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