New mortgage activity improves in NSW

by Gerv Tacadena10 Dec 2020

Australian major banks have reported robust activity from new mortgage applicants in New South Wales over the month of November, with volumes reaching their highest point in two years, according to data from the NSW Land Registry Services.

New mortgage activity in non-authorised deposit-taking institutions (ADIs) was also strong, clocking 22% growth.

Overall, the level of new mortgage activity in the state has been on an uptrend for the past six months. In fact, activity from new mortgage borrowers has already increased by over 50% since May.

Jerry Goldfried, director for data and insights at NSW Land Registry Services, said a lender’s share of newly-originated mortgages can have significant revenue impacts.

"Without gaining sufficient volumes in newly originated mortgages, lenders are forced to rely on attracting refinance customers, in a market awash with competitive incentives, this is becoming more costly and challenging. We have already seen refinance volumes start to soften in November," he explained.

Notably, major banks comprised a smaller share of refinancing activity in November. Yet, even with the decline in activity, refinancing volumes at the big four remained higher than the lows recorded pre-COVID-19.

Overall, refinancing volumes remained strong in the state over the month, with all other lending segments charting gains. Customer-owned banks returned to overall growth for the first time since April.

The data also showed the substantial gains in new mortgage activity and the stable refinancing contributed to the second highest month for mortgage volumes in two years, behind October 2020.