New mortgage lending across Australia’s mainland states rose 4.4% year-on-year in the March quarter, with 118,320 new loans settled, according to PEXA’s latest mortgage insights report.
“A total of $80.2 billion in new loans were settled in the quarter, a 7.6% increase compared to the same period last year, with $73.5 billion going towards residential property purchases,” PEXA said.
The surge in lending activity follows the Reserve Bank’s recent 25-basis point cash rate cut, which has reignited mortgage competition among lenders.
“Although it may be too early to see the full impact of the cash rate cut on new loan volumes, refinance volumes are quicker to respond,” PEXA said. “Many lenders have already slashed their fixed-rate loans and are beginning to offer cashback incentives.”
Refinancing also picked up sharply, with 91,786 refinances settled in the quarter, up 12.5% year-on-year.
The PEXA report also comes ahead of an anticipated May rate cut, which is expected to provide further support for mortgage lending and settlement activity.
Investor demand continues to outpace owner-occupier lending.
Over 2024, investment loan commitments recorded strong double-digit growth, particularly in Queensland, Western Australia, and South Australia.
“This reflects relative affordability compared to markets like Victoria,” PEXA said, noting that these state trends are expected to continue throughout 2025.
New South Wales and Victoria, however, recorded the largest quarter-on-quarter declines in loan volumes compared to the spring 2024 peak.
Queensland, which recently launched a construction inquiry to boost home building, has maintained its lead for the highest volume of new loans since mid-2021, driven by population growth and relative affordability.
In year-on-year terms:
In a parallel trend, property settlement volumes have also shifted towards the more affordable eastern and western states. PEXA’s property insights report showed:
Despite disruptive events such as Cyclone Alfred and the Easter holidays, settlement activity in Queensland remained resilient, growing 1.5% in March compared to a year earlier.
Median residential prices in Greater Brisbane and Regional Queensland surged by 12.3% and 13.6% year-on-year, respectively, indicating strong housing demand.
While residential markets flourished, commercial property settlement volumes painted a mixed picture:
“The commercial property sector appears sluggish in NSW compared to its eastern counterparts, while QLD and VIC performed stronger,” PEXA said.
The recent rate cut is providing relief to mortgaged households, with estimates suggesting that households with a $500,000 loan are saving about $80 per month on repayments.
Meanwhile, building approvals have increased across all mainland states, suggesting an improving housing supply outlook.
However, persistent affordability challenges remain in Sydney and Melbourne, where price growth continues to outstrip incomes.
In the coming months, analysts expect further support for mortgage lending and settlement activity, but caution that global economic uncertainty — including escalating trade tensions and financial market volatility — could weigh on consumer sentiment.
“There’s growing momentum in property markets across Queensland, Western Australia, and South Australia, and renewed competition among lenders is driving a wave of refinancing activity,” PEXA said.
