Over the year, the volume of refinancing activity rose 13.8% to 450,177, with all states reporting a significant increase.
Western Australia led with 29.5% growth in refinancing activity, followed by South Australia with 19.4% and Queensland with 17.4%.
In terms of volume, however, Victoria consistently led the states over the past four years. During the latest financial year, Victoria clocked in over 150,000 refinances.
Following Victoria was New South Wales with 134,411 refinances over the year.
Major banks took the lion’s share of the refinancing market — they account the highest proportion of activity in Western Australia at 68.7%.
This was consistent with the latest numbers from the Australian Bureau of Statistics, which showed that the value of total refinancing between lenders went up 12.6% year-on-year in June.
PEXA head of research Mike Gill said the increase in refinances over the past financial year was boosted by the high proportion of recent borrowers who had taken out fixed-term loans over the preceding few years.
“These borrowers are now rolling off their low interest, fixed-term loans, leaving them open to a better deal — the lure of attractive incentives offered by many of the major banks over the year to entice borrowers to switch lenders, is clearly working,” he said.
Mr Gill said major lenders increased their market share for loan refinancers by 1.9%.
“In an environment of rising interest rates we have seen intense competition between lenders, with the major banks fighting hard to attract new customers – and they’ve been successful,” he said.
Mr Gill said the same was true for new loans, with major banks growing their share the most in NSW by 3.1%.
However, the total number of new loans issued over the financial year was down 20.6% to 481,234 during the year, with all states experiencing double digit drops in new loans.
Queensland led the states with the highest number of new loans issued in the year at 131,463.
On the other hand, New South Wales and Victoria witnessed the greatest declines, as new lending activity returned to similar levels to 2020 during the onset of the pandemic.
“New lending activity declined across the board in 2023 financial year, which reflects the property market normalising to pre-pandemic levels, after an exceptional boom across all mainland states over the previous two years,” Mr Gill said.
Photo by golibtolibov on Canva.