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PEXA’s latest Mortgage Insights for the March quarter 2025 has revealed that 118,320 new loans were settled throughout the quarter, representing a decline of 18.9 per cent on the December quarter 2024, and a 4.4 per cent rise on the same period last year.
The aggregate national value of new loans fell by 21.7 per cent from the previous quarter, down to $80.2 billion, the majority of which ($73.5 billion) were for residential property, which fell by 20.6 per cent.
Annually, values increased by 7.6 per cent (total) and 8.2 per cent (residential only).
According to PEXA, these quarter-on-quarter falls were largely reflective of a strong spring selling season during 2024, particularly in NSW and Victoria, which recorded the sharpest declines of the observed states.
The total volume of new residential loans in NSW fell to 28,145 during the March quarter from 37,861, while new residential loans in Victoria fell to 30,601 from 38,083.
The insights report suggested that another 25-bp cut in the Reserve Bank of Australia’s cash rate (currently at 4.1 per cent) is set to increase borrowing capacity for budding home buyers, while simultaneously “reignite competition for mortgages”.
“Although it may be too early to see the impact of the cash rate cut on new loan volumes, refinance volumes are quicker to respond,” according to PEXA.
“Many lenders have already responded by slashing their fixed-rate loans and some are beginning to offer cashback incentives.”
PEXA’s insights report further revealed that housing finance for investors has far outpaced financing to owner-occupiers. While the volume for new loan commitments for investors might have peaked in the September quarter 2024, strong double-digit growth still persisted for this cohort of borrowers throughout the year.
Investor growth was the strongest in Queensland, Western Australia, and South Australia, with the weakest being recorded in Victoria, reflecting relative levels of where property prices have become more expensive.
The volume of new commercial loans also fell 23.1 per cent quarter on quarter, with 3,810 new commercial loans across NSW, Victoria, and Queensland. Despite the fall, this was still 9.7 per cent higher than the same quarter in 2024.
NSW recorded the steepest fall in new commercial loans, falling from 1,426 to just 940 in the March quarter, followed by Queensland, falling from 1,868 to 1,522 and Victoria (down from 1,658 to 1,348).
New commercial loan values also fell by 32.1 per cent to $6.7 billion; however, this was up 1.3 per cent on the March quarter 2024.
