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PEXA’s latest Mortgage Insights report for the 2024 calendar year (CY24) has found that new loan volumes during the December quarter of 2024 were the highest in Victoria, despite lower settlement volumes when compared to its east-coast neighbours – NSW and Queensland.
According to the report, this has signalled a stronger presence of first home buyer (FHB) activity when compared to other states due to the fact that FHBs are more likely to require and obtain a mortgage than other types of buyers, such as investors.
PEXA said that the increase in FHB activity within Victoria is likely due to decelerating home prices over 2024, which led to reduced investor interest and “widespread reports of investors selling up”.
The report said quarterly rental bonds data released by the Department of Families, Fairness and Housing (DFFH) showed a decline in the number of active rental bonds (and therefore the number of rental properties) fell by 24,726 in the year to September 2024, confirming reports of investors selling up to FHBs.
As of December quarter of 2024, new loan volumes in Victoria increased to 39,741, up from 35,965 in the September quarter. In comparison, new loans in NSW were 39,287 during the same period and 39,208 in Queensland.
Overall, 538,519 new loans were issued in CY24, representing an 11.7 per cent increase from the previous calendar year and a 15.5 per cent increase on CY20, while the national aggregate value of these new loans increased to $362.9 billion, up 21.4 per cent year on year and 79.3 per cent since 2020.
New residential loans comprised 516,000 of the overall total, up by 11.8 per cent (year on year) and 14.6 per cent (since CY20), with an increase in value of 21.5 per cent to $330.8 billion and 77 per cent since 2020.
Meanwhile, the value of new commercial loans saw a surge year on year, increasing by 20.6 per cent to $32.1 billion (up 106.9 per cent since 2020), with a total of 17,000 new loans issued (an increase of 9.5 per cent).
The report said: “CY24 saw a widening divergence in property markets around Australia, particularly with regard to median prices.
“Home prices continued to rise strongly in Brisbane, Perth and Adelaide, but were flat on average across Greater Sydney and gently decreased in Melbourne.
“This meant that Sydney and especially Melbourne showed a small improvement in affordability for first home buyers entering the property market. This has led to a stronger rise in new mortgage volumes in these states, since first home buyers are more likely to require a new mortgage than other types of buyers.”
[RELATED: FHB investors twice as active as owner-occupiers]
