Australian Property Market Shows Resilience Amid Refinancing Slowdown
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In the first quarter of 2024, the Australian property market demonstrated robust resilience despite a notable dip in refinancing activities, according to a recent report by PEXA Group. The data highlighted a strong recovery in property settlements across all mainland states, with Queensland leading the pack in both settlements and new residential loans.
“The property market’s resilience is largely supported by the current economic environment, which includes stable interest rates, a robust labor market, and a significant decrease in headline inflation,” said Julie Toth, PEXA Group’s chief economist.
The total value of property transactions in the March quarter impressively reached $150.6 billion, marking a 17.2% increase from the previous year, with New South Wales at the forefront in total sales value. Despite the general uptick, the period saw a moderation in refinancing activities, primarily due to the expiration of many fixed-rate loans initiated in the years 2020-21.
Rommel Lontayao, reporting on the market trends, highlighted that “the overall number of new loans declined from the previous quarter, reflecting a normal seasonal effect. However, the year-on-year increase indicates the market’s recovery in 2024.”
Toth further commented on the seasonal adjustments, noting, “The March 2024 quarter experienced a seasonal decline in both property and loan volumes, compounded by a higher than usual number of public holidays due to an early Easter calendar. This seasonal impact was anticipated and does not detract from the recovery trend we have observed over the past year.”
The decrease in refinancing activities aligns with historical trends and follows the cessation of refinancing incentives by lenders. Despite this, Toth remains optimistic about the market’s outlook for the remainder of 2024. “Stable interest rates, solid employment, and falling inflation are supporting demand for housing and suggest a positive outlook for the remainder of 2024,” she stated.
With the market’s swift recovery from high inflation and interest rate pressures in 2023, the Australian property sector continues to exhibit strong demand and buyer confidence, indicating a healthy economic trajectory as the year progresses.
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