Mortgage demand in Australia has surged to levels not seen since the record low-rate environment of 2021, according to new data from Equifax. This increase comes despite ongoing affordability pressures that are hindering new lending. The data was released ahead of the Reserve Bank’s cash rate decision. Equifax is a global data, analytics, and technology company. It provides insights that help businesses and consumers make informed decisions.
Equifax executive general manager Moses Samaha noted that while three rate cuts this year have offered some relief to mortgage holders, rising property prices are creating new challenges for prospective buyers. “Mortgage demand is strong; however, we are facing an affordability threshold challenge,” he said. The latest figures show that new mortgage accounts opened have declined year-on-year for the second consecutive quarter, indicating a barrier to entry for many.
According to Equifax data, mortgage enquiries jumped by 10.3 per cent in the September quarter, representing the strongest year-on-year growth since 2021. However, new mortgage accounts declined by 0.8 per cent over the same period. The average loan limit reached a record $556,000, marking a 5.6 per cent increase from the previous year. This reflects the impact of higher property prices and subsequently, larger loan sizes.
Mr. Samaha explained that while many first home buyers have access to assistance through the government’s expanded 5 per cent deposit scheme, increased house prices demand larger loan amounts. This results in higher loan-to-value ratios, pushing borrowers beyond the qualifying affordability criteria and thus impacting the number of new mortgage accounts being opened.
