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New home loans rise 3.1% in March as buyers jump in ahead of expected rate cuts, ABS data shows


The value of new home and investment property loans increased by 3.1% in March to $27.64 billion, marking the second consecutive month of growth, according to the latest ABS Lending Indicators seasonally adjusted data.

First home buyers led the surge in new lending, with the value of loans to this group growing by 4.4% over the month to $5.19 billion in March and up by 17.9% over the year. These buyers are making the decision to purchase now amid lower borrowing power instead of waiting for rate cuts.

Investors also showed strong activity, with new lending rising by 3.8% from the previous month and 31.1% compared to the same time last year, reaching $10.17 billion in March.

Upgraders or downsizers were more subdued, with new lending to this group increasing by only 2.1% over the month to reach $12.29 billion.

Canstar’s finance expert, Steve Mickebecker, commented, “The housing market returned to boom conditions in March with total housing lending up by $839 million or 3.1 percent for the month. This is a huge 17.9 percent above March 2024, not at all what the Reserve Bank would be hoping for as it strives to slow spending.”

The Big Four banks have dominated new loan settlements, with almost three-quarters (74.08%) of new loans settled with a major bank in March, up from 69.80% in March 2022.

Despite the surge in new lending, fewer borrowers were seeking better deals, with the value of existing loans refinanced to a new lender falling by 2.5% compared to February, totaling $16.02 billion in March.


Canstar’s analysis indicates that borrowers could save significantly by switching from the average Big Four variable rate of 6.57% to the lowest ongoing variable rate of 5.75% available on their database, potentially reducing monthly repayments by $319 or over $3,828 per year on a $600,000 loan.

Mickenbecker encouraged borrowers not to let a big brand lender keep them from securing a better deal with a lesser-known provider, stating, “The message to other borrowers is don’t wait, make the cut happen for yourself. The higher quarterly inflation figure reported for March means relief for borrowers is likely to be further off if they leave it in the hands of the Reserve Bank.”

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