News release – 8 September 2021
Property refinances hit record highs in Australia during August 2021, surpassing the previous record set in June 2020 following the Reserve Bank of Australia’s rare double rate cut earlier that year, according to analysis released today by PEXA.
The PEXA Insights team has today launched its Refinance Index, an interactive online tool that shows market performance within the property refinancing sector. As illustrated in the chart below, refinance activity has been steadily increasing since October 2019, however, it has now reached unprecedented levels.
According to PEXA Insight’s Head of Research, Mike Gill: “Whether it is the forced downtime to reassess finances during COVID-19 related lockdowns, or speculation surrounding a potential interest rate rise as early as late 2022, refinance activity has reached new heights nationally. PEXA’s Refinance Index stood at 187 points for the week ending 29 August 2021, up 46.9% year-on-year.”
The Index also provides a state-by-state comparison of Australia’s mainland states, with Queensland leading the country for refinance growth at 217.9 points, up 71.3 points year-on-year. South Australia came in closely behind at 206.2 points (up 70.6 year-on-year), with New South Wales at 195.5 points (up 50.9 year-on-year), Western Australia at 193.3 points (up 93.3 year-on-year), and Victoria at 164.9 points (up 53.3 year-on-year) all demonstrating strong refinance activity.
“The growth in Queensland represents record highs for the sunshine state as property owners continue to take advantage of ultra-low interest rates to seek out better deals on their home loan,” said Mr Gill.
In the 2020-21 financial year, the market saw approximately 300,000 refinances completed, up around 10% on the previous year. This trend demonstrates a savviness by Australian consumers to try and get the best deal on their mortgage, and Mr Gill does not believe this trend will end anytime soon.
“We anticipate a dip in property sale transactions as a result of the extended COVID-19 led lockdowns in New South Wales and Victoria, however refinance activity is expected to remain elevated in the near future based on the current trendline,” said Mr Gill.
About PEXA’s Refinance Index
PEXA is perfectly positioned to provide a comprehensive view on the market with more than 95% of refinances completed on the PEXA exchange. PEXA’s Refinance Index has been developed to provide timely insights into property refinancing across Australia. The Index currently includes more than 2.5 years of data and is updated every Tuesday, displaying the prior week’s results (week ending Sunday).
The Index starts at 100 points from 15 October 2018, showing changes in refinance activity from that point. For example, if the index rises from 120 points to 140 points (increase of 20-points), this represents an increase of 20% compared to the starting point of the Index. PEXA has created indexes for volume (number of refinances) and value (median monetary value of refinances). Insights are available at a national, state and regional level, and users can select multiple states to compare trends. The Index data is represented in two views,
Base – showing weekly changes in refinancing volume or value.
Seasonally adjusted – the base view with seasonal variations smoothed to show underlying trends more clearly.
To access the PEXA Refinance Index, visit: pexa.com.au/insights.
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