Borrowers refinanced A$16.4 billion of housing loans with another lender in March, an increase of 4.6 per cent over the previous month, while the value of new housing loan commitments grew at a much slower pace.
According to the latest Australian Bureau of Statistics lending figures, the value of new housing finance commitments grew by 1.6 per cent to $33.3 billion in March.
Broadly, what the numbers indicate is that for every dollar they lend to home buyers and residential property investors, lenders are seeing 50 cents go out the door as customers refinance. And that is before counting loans that get paid out and funds that are being piled up in offset accounts.
ANZ provided a picture of how this looks in its interim financial report, released yesterday. The bank sold $27 billion of home loans and provided $8 billion of internal refinance during the six months to March.
This was offset by $10 billion of external refinance and $32 billion of repayments, leaving it with a small reduction in the value of its mortgage book when offsets are taken into account.
ANZ customers increased their offset account balances from $36 billion last September to $41 billion at the end of March, when 68 per cent had money in offset accounts. One-third are more than two years ahead with their repayments.
With rates on the rise, refinancing rates may also rise as borrowers shop around, while new lending may slow or decline.
The ABS data shows that lending to owner occupiers in March was up 0.9 per cent month-on-month and has fallen 2.2 per cent over the 12 months to March.
Lending to investors was up 2.9 per cent month-on-month and up 48.4 per cent over 12 months.
With the exception of February, the value of new investor loan commitments has increased every month since November 2020.
The value of new lending to first home buyers rose 5.9 per cent month-on-month but was down 25.2 per cent over 12 months.
The 1.6 per cent overall rise in March followed a fall of 3.5 per cent in February and a record high of $33.9 billion in January.