New data from Money.com.au, reveals that 515,116 home loans were issued across Australia in 2024, representing an 11 per cent increase from the previous year and totalling $331 billion in mortgages.
The investor segment demonstrated particular strength, growing at more than triple the rate of owner-occupier loans, with investor loans growing 22 per cent annually compared to just 6 per cent for owner-occupier loans.
Money.com.au‘s Property Expert, Mansour Soltani, said good market conditions were driving this trend.
“With vacancy rates across capital cities at record lows, rental demand showing no signs of easing and population growth, we’re likely to see the investor market pull even further ahead in 2025 as market conditions shift in a downwards rate cycle,” Mr Soltani said.
Victoria emerged as the standout performer in the owner-occupier segment, recording a 10 per cent year-on-year increase in loans.
The state’s relative affordability has created unique opportunities for homebuyers, with the average loan size of $615,175 showing only a modest 2 per cent annual increase.
“Property prices have stayed relatively steady in Victoria compared to other states, so it’s one of the best-value markets in the country right now,” he said.
Queensland has established itself as Australia’s second-largest investor market, securing 23.8 per cent of investor loans in 2024, surpassing Victoria for the first time on record.
The state processed 45,872 investor loans compared to Victoria’s 42,567.
The Northern Territory, while accounting for just 1 per cent of total investor loans, recorded the largest increase in investor loans in 2024, rising 40 per cent year-on-year.
The first home buyer market showed signs of stabilisation, with a 6 per cent increase in 2024 compared to 2023.
Despite a slight slowdown in the December quarter, experts remain optimistic about the sector’s prospects.
“We’ve had our first rate cut in nearly five years, and more are expected in 2025, which will boost borrowing power,” Mr Soltani said.
“On top of that, government incentives are at an all-time high.
“Additionally, the Bank of Mum and Dad is in a stronger position than ever to help with deposits or act as guarantors, as rising property prices have boosted their home equity.”
Refinancing activity has shown renewed vigour, particularly in the final quarter of 2024, with 161,276 loans refinanced – the highest level since September 2023.
Internal refinancing rose by 15 per cent in Q4 2024 compared to the same period in 2023, while external refinancing showed signs of recovery with a 5 per cent increase.
This marks a significant shift in the refinancing landscape, with internal refinancing driving much of the growth despite typically accounting for a smaller share of refinancing activity.
The recent interest rate environment has also played a crucial role in market dynamics.
New owner occupier variable rate loans experienced a slight decline of 0.03 per cent in the December quarter, occurring independently of the cash rate cycle.
The Reserve Bank of Australia’s decision to cut the cash rate by 0.25 per cent to 4.10 per cent in February 2025 suggests further reductions in lending rates may be on the horizon.
“This will fire up the refinancing landscape again after many borrowers were stuck in ‘mortgage prison’ due to high interest rates impacting their serviceability,” Mr Soltani said.
