The average new home loan in Australia has risen to $636,208, marking an 8.8% annual increase, according to Money.com.au’s latest Mortgage Insights report.
Western Australia and Victoria are driving owner-occupied loan growth, with annual rises of 7% and 6%, respectively.
“We’re seeing a shift in buyer activity, moving from the West back to the Eastern states,” said Mansour Soltani (pictured above left), Money.com.au’s home loans expert.
Investor loans have surged by 32% in value year-on-year, with Western Australia leading the charge at a 43% increase in loan numbers. Queensland followed with a 21% rise, while South Australia saw a 14% increase, aligning with the national average of 17%.
First-home buyers (FHB) are flocking to Victoria, which now accounts for 31% of all FHB loans nationwide, up 14% annually.
“Victoria’s more affordable property prices compared to Sydney, along with a strong housing supply, make it attractive to first home buyers,” Soltani said.
New South Wales follows, accounting for 25% of FHB loans, with Queensland at 19%.
External refinancing has dropped by 24% over the past year, while internal refinancing is up by 14%. For the first time since December 2022, new loans outnumber refinance loans.
“This reflects more Australians entering the housing market and existing borrowers refinancing less frequently due to fewer incentives to switch lenders,” said Peter Drennan (pictured above right), Money.com.au’s research and data expert.
Interest rates have remained relatively steady, with minimal movement in variable rates for owner-occupied loans. Fixed rates, however, saw fluctuations, with investor loan rates increasing slightly.
“Lenders are signalling that they are less interested in offering fixed rates to investors,” Drennan said.
A key insight from Money.com.au highlighted the widening gap between wage growth and housing costs.
Over the past five years, wages have increased by just 15%, while the cost of new homes has surged by 39%, nearly three times faster than wage growth.
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