Mortgage volumes in the country’s most populous state grew 14 per cent in 2020, driven by strong refinance activity, new figures have revealed.
According to the December 2020 Residential Mortgage Activity report from NSW Land Registry Services (NSW LRS), there were 249,254 mortgages registered on NSW residential titles over the year – up nearly 14 per cent on the prior year.
The growth was strongly propelled by refinance activity, which rose 22 per cent year-on-year as the country as a whole saw record-low interest rates and lenders offer competitive cashback offers.
According to the NSW LRS, the Commonwealth Bank of Australia (CBA) received the largest number of mortgages for NSW property in 2020, accounting for 56,020 mortgages registered in the state, up 12 per cent on its position in 2019.
The major bank also received the largest annual volume increase in newly originated mortgages.
ANZ, which reported a surge of activity earlier in the year (resulting in a slowdown of turnaround times), was the lender that recorded the largest increase in mortgages held over NSW property over the course of the 12 months. According to the data, the lender’s annual volumes rose 80 per cent to 33,585 mortgages. Its overall performance was driven by loans being refinanced into the bank – winning almost three times more mortgages through refinancing than in 2019, according to NSW LRS.
Westpac was the lender that lost the most mortgages on resi titles in 2020.
Meanwhile, Macquarie gained the greatest share of mortgages written against NSW residential titles (gaining 2,500 more than any other lender in NSW) and has more than doubled its mortgages on NSW titles over the last 18 months.
December 2020 figures
While the mortgage market faced disruption over the year due to the coronavirus pandemic and its associated economic impacts, the final month of the calendar year saw the NSW residential mortgage market hit a three-year high (and the third highest in more than 16 years).
In December 2020, newly originated mortgages were up 25 per cent on December 2019 and reached the largest net gain in over 24 months.
This was attributed to previously unencumbered residential property being leveraged (as evidenced by the increase in new mortgages (25 per cent) versus ‘closed’ mortgages (15 per cent)).
In the final month of the year, refinance volumes continued to remain strong (up 5 per cent on December 2019) but softened relative to the mid-year refinancing peak.
The majors also grew their market share of new mortgages in December 2020 when compared with the prior comparative period, with 1,813 mortgages being retained by the big four banks, the highest in over 24 months.
Non-major domestic banks recorded a positive net refinance position in December 2020. The segment recorded positive net refinance for every month in 2020, with December 2020 providing the second-strongest month, winning 1.8 mortgages to every one lost.
Noting the 2020 figures, the director of analytics and insights at NSW Land Registry Services, Jerry Goldfried, commented: “In a year like no other, trends were disrupted – particularly for emerging non-ADI lenders.
“There have since been early indicators of a rebound for some lenders in the closing months of 2020. Given that mid-year mortgage activity was impacted as NSW property buyers navigated COVID-19, it is encouraging to see December close out so strongly.”
[Related: Brokers’ lodgements continue to rise]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.
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