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PEXA’s latest Mortgage Insights for the September quarter of 2024 has shown an increase of 15.2 per cent on the same period in 2023 of new commercial loans recorded across NSW, Victoria, and Queensland, equating to 4,387 new loans.
On a quarterly basis, commercial loans rose by 3.4 per cent from the June to September quarters and 59.1 per cent since the financial year 2020.
Overall, a total of 137,186 new loans were issued during the September quarter, showing a 16.2 per cent increase on the same quarter last year, with the majority of these loans (around 96 per cent) being for residential properties.
Queensland saw the highest rate of growth in new residential loans with 36,078 (up 19.7 per cent year on year), followed by South Australia with 8,174 new loans, an increase of 17.3 per cent.
According to PEXA, the September quarters historically tend to perform at a lower volume than other quarters due to following the end of the financial year where there is a typical surge in settlements.
The report found that this seasonal pattern was more pronounced in every state other than Queensland, which usually has a smoother quarter-to-quarter settlement pattern.
Additionally, the volume of new loans usually moves in line with property settlement volumes; however, new loan volumes have increased in market share over recent quarters as cash purchases (property settlements with no mortgage) continue to fall.
In terms of settlements, the mainland states saw a total of 183,288 settlements valued at $178.3 billion during this quarter, an increase of 11.1 per cent in volume and 19.8 per cent in value on the same period last year.
Queensland also recorded the highest number of residential settlements, as Brisbane held its spot as the country’s second-most expensive city after Sydney.
Furthermore, the commercial property market has bounced back from a slow start at the beginning of 2024, with the largest improvements in settlements being recorded in NSW (up 10.3 per cent) and Victoria (up 10.7 per cent).
The value of commercial property also increased by 8.5 per cent to $18.9 billion (year on year) through sales in NSW, Queensland, and Victoria.
Julie Toth, PEXA Group’s chief economist, said that the reports have shown that demand for new housing “continues to outstrip supply”, resulting in an increase in more buyers “seeking existing properties and prices, with strong growth in both capital cities and regional areas”.
“Growth in new housing supply – including housing and apartments – has continued to lag behind growth in demand for new housing nationally in most locations,” Toth said.
“New homes are taking longer and costing more to build than in the past. High labour and material costs have added to the rising price of new builds. These capacity constraints are pushing more buyers into the market for existing home and pushing home prices higher.”
She said that strong population growth and low household sizes also continued to support strong underlying demand for housing.
In terms of mortgage trends, consumer sentiment was tentatively improving in response to better conditions, but debt-related sentiment remained highly cautious, according to Toth.
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