Refinancing surges by 29% across east coast during FY22

As highlighted in PEXA’s latest Mortgage Insights Report, there was a record 331,976 property refinances across Queensland, NSW and Victoria. 

According to PEXA’s figures, this is a year-on-year lift of 29 per cent. 

Queensland reported the highest lift in residential and commercial refinancing over the 12-month period, with the third-most populous state reporting a 49.8 per cent upswing to hit 73,035. 

However, NSW and Victoria both reported significant upward momentum in refinanced loans over the same period, with the states reporting 25.8 per cent and 23.7 per cent. 

Further, Victoria was reported to have the highest volume of residential and commercial refinances during FY22 at 131,287. 

NSW was reported to have concluded the financial year at a figure of 127,654. 

Speaking of the data, PEXA Insights head of research, Mike Gill, said these figures confirmed the influence that rising interest rates are having on Australia’s housing market.    

“We have seen heightened refinancing activity over several years, and while initially Australians were taking advantage of record low interest rates, there is now a clear correlation between the high numbers we saw during FY22 and the Reserve Bank of Australia’s determination to lift interest rates twice before the close of the financial year,” Mr Gill said. 

Separate data in PEXA’s report also suggests this trend for new loans, with demand dropping over the financial year. 

According to these figures, new loans increased across all three states during FY22. 

Queensland was reported to have the highest volume of residential loans over this period at 159,894, accounting for a 10.3 per cent lift. 

Victoria reported the largest growth over the period at 10.4 per cent, with new residential loans increasing from 142,774 to 157,666. 

Across NSW, new residential loans increased by 2.5 per cent to hit 154,744. 

However, this overall increase does not reflect PEXA’s 12-month trend, with new residential loans appearing to have peaked in December before falling over the remainder of the financial year. 

Further, despite a recent bump across all three states over May and June, new residential home loans were lower at June 2021 than they were at June 2022. 

“The record levels of new loans coincide with the strong buying and selling activity witnessed throughout the first half of FY22,” Mr Gill said, “in particular in Queensland which has experienced a state-based property boom across home buying and selling.”

This cooling in housing demand has also been observed in separate data. 

According to CoreLogic figures from last month, the annual growth of housing values in the 12 months to June was 11.2 per cent.   

However, six months earlier, the annual growth rate was almost double at 22.1 per cent.

[Related: New mortgages lift nationally over June: PEXA