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Data & Insights

Property refinances hit record highs as Australians take advantage of low interest rates

By PEXA • Jul 2021

Savvy property owners across Australia’s east-coast have taken advantage of record low interest rates, with more than 256,000 refinance settlements occurring across the 2020-21 financial year, surging above the previous year’s levels in Queensland, New South Wales and Victoria, according to the latest analysis released today by PEXA, Australia’s leading digital property settlement platform.

PEXA’s Refinance Insights report follows last month’s Property and Mortgage Insights report, focussing specifically on identifying refinance trends. The report found refinance activity in New South Wales saw the steepest rise, up 15% year-on-year to over 101,000, while Queensland volumes also increased by 12% year-on-year, with more than 48,000 refinances settled. Victoria recorded the most refinances of any other state with more than 106,000, just surpassing its northern neighbour, however witnessed lower year-on-year growth (under 4%).

In June 2021, New South Wales (approximately 11,000 refinances) and Queensland (approximately 5,000) both recorded two-year record highs for volumes of refinances settled within a month.

PEXA’s Senior Research Manager, Mike Gill, said: “We witnessed a significant spike in refinances in June 2020 following the Reserve Bank of Australia’s rare double rate cut in March of that year. We have seen elevated levels of refinancing activity since then across all eastern states.    

“The recent records set in June 2021 within New South Wales and Queensland coincide with public commentary of a potential interest rate rise sooner than previously forecast by the Reserve Bank. These numbers suggest consumers may be wanting to lock in the best deal possible before any upward movement”.      

PEXA’s latest report also analyses the monthly net positions of financial institutions when it comes to refinances. Prior to the onset of COVID-19 restrictions in March 2020, non-major banks held a dominant position for refinances across all eastern states. This trendline changed during the national lockdown, with major banks moving into the stronger position, however, latest analysis suggests that non-major financial institutions are beginning to reclaim market share.

The major banks lost their winning position for refinances in the December 2020 quarter across all eastern states. Throughout the calendar year 2021, major banks were level with non-major banks in New South Wales and Victoria, while in Queensland the non-major banks have moved ahead.

With almost half the country experiencing a level of lockdown at the time of issuing its latest report, the PEXA Insights team will continue to closely monitor the property market and the effects of snap COVID-19 lockdowns.

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