- New South Wales (NSW) loan lodgements fell 25% since January as buyers navigate rising interest rates.
- Owner-occupier upgraders in NSW bucked national trends by rising 7% while investor lodgements fell 39%.
- Refinancing hit a record 57% of lodgements as homeowners review options to secure the right loan.
With September marking the fourth Reserve Bank of Australia (RBA) rate hike this year, the property market is slowing down as buyers and sellers face growing uncertainty.
According to Loan Market’s October loan trends report, loan lodgements (excluding refinancers) in NSW have fallen -25% since January, before the rate-hike cycle began, slightly above the national average of -24%.
“As property prices decline and interest rates increase, buyers are likely exercising caution,” Loan Market credit expert Shay Waraker said.
“With borrowing capacities impacted by increasing rates, buyers may be waiting to see if prices fall further before jumping into the market.”
While new lodgements have fallen across the board, investor activity has seen the biggest decline.
Along with four rate hikes, investors have also felt the brunt of the Budget changes to capital gains tax and negative gearing. Since January, Loan Market has seen the number of loan lodgements by investors fall 39% in NSW, below the national average of -44%.
Nationally, investor lodgements for existing property have declined 56% since prior to the rate-hike cycle (end of Jan-26). New properties have also declined, however far less than existing properties, at -10%.
In NSW, the number of first-home buyer loan lodgements has fallen 19%, while loan lodgements for owner-occupier upgraders have actually increased by 7%. NSW is the only state to have experienced an increase in any category.
However, the rate-hike cycle has driven an increase in people refinancing.
“When rates increase, there are two things we usually see: a decrease in new loan lodgements, and an increase in people refinancing,” Ms Waraker said.
“After a rate hike, mortgage holders tend to look more closely at their loan – whether to see if they can find a more competitive deal or make some changes to free up cash flow.
“In this current climate, many homeowners are looking for some wiggle room in their budgets.”
Off the back of this, refinancing reached a record high of 57% of all Loan Market Group lodgements during September, as brokers searched for a better deal for their customers in a rising rate environment.
