Refinancing kept the home loan market from plummeting fiurther this year as it underpinned a slight rise in housing finance.
ABS figures released this week showed a slight rise in housing finance, but Loan Market COO Dean Rushton said this is largely down to a significant increase in refinancing.
Rushton said refinancing was up 17% on last year, and that Loan Market had seen a 15% surge in the weeks since the RBA's November rate cut.
"With the broader credit market bottoming out to a 10-year low this past year, it's refinancing which has kept the market from plunging into much lower levels," he said.
Rushton pointed out the ABS data showing the increase in refinancing was compiled prior to the Reserve Bank's consecutive rate cuts. He predicted that 2012 would see further growth as borrowers jump at the reduced interest rates.
"The RBA rate cuts in November and December have brought forward queries of those looking to refinance, and also first homebuyers, particularly in New South Wales," Rushton said.