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Property lending activity remains at record highs ahead of speculated interest rate rise

Property lending activity remains at record highs ahead of  speculated interest rate rise

News release – 27 April 2022

New loans and refinance activity remain at record highs across mainland Australia, with Victoria recording the most new loans of any state with 38,619 between January and March 2022, according to the latest analysis released today by PEXA Insights, the research arm of PEXA – Australia’s leading digital property settlement platform.

PEXA’s Mortgage Insights report found that all mainland states experienced a seasonal decline in new loans when compared to the previous quarter, however Victoria, Queensland (36,814 new loans), New South Wales (35,303 new loans) and Western Australia (17,689 new loans) all recorded similar numbers to the record highs we saw in the first quarter of 2021. Refinance volumes, however, were well up on the prior year with Western Australia (54% up year-on-year) and Queensland (43% up year-on-year) the market leaders to kick start 2022, experiencing the highest quarterly year-on-year growth across the nation.  

The report also analyses the winners and losers within the financial sector from lending activity across the quarter, with major banks declining to their weakest market position in two years within all four major states: News South Wales, Victoria, Queensland and Western Australia.

PEXA Insights’ Head of Research, Mike Gill, said: “Record low interest rates, combined with increased speculation within the market of imminent rate rises, has driven property owners to refinance right across the country.

“The major banks ceded ground to the non-majors in the first quarter of 2022 in both new loans and refinances. This was driven by the major banks increasing fixed loan rates in expectation of interest rate rises, together with non-majors competing strongly on variable loans.

“We suspect borrowers were also attracted to non-major lenders, with many, as widely reported, offering quicker approval times and increased likelihood of loan approval,” said Mr Gill.   

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