16/04/2025
National Growth Driven by Four Key States
A recent article shared by brokerdaily shows loan approvals across Australia have seen a notable year-on-year increase in the March quarter, with a new report highlighting strong growth in four key states. The latest data, drawn from Loan Market Group’s nationwide network of 6,000 brokers, shows a 15% lift in national loan approvals compared to the same period last year.
New South Wales, Queensland, South Australia and Western Australia have led the charge, demonstrating robust activity across both investor and owner-occupier lending. Victoria, however, has fallen behind, with only a modest 3% growth in approvals.
Investor Lending Powers Market Momentum
Investor lending has proven to be a major driver of the uptick in some states. New South Wales saw a 32% surge, while South Australia recorded an impressive 50% jump. In Queensland, owner-occupiers have been behind much of the growth, particularly in lifestyle-driven regions such as the Sunshine Coast, Far North Queensland, and Brisbane. These areas have each seen 25% growth in approvals since the third quarter of 2022.
Victoria’s Struggles Continue
Meanwhile, Victoria has struggled. Loan approvals in the state have declined by 8% since Q3 2022, and investor lending in Melbourne’s western suburbs has dropped sharply, down 43%. This contrasts starkly with the upward momentum observed in other states.
Regional Hotspots Attracting New Buyers
Loan Market Group CEO David McQueen noted a clear shift in investor confidence towards non-capital regions. Areas such as Perth, regional Queensland, and coastal parts of Sydney are drawing buyers who are optimistic about long-term growth and increasing rental demand. He suggested the next wave of loan growth will likely come from owner-occupiers re-entering the market as interest rates drop and confidence returns.
Lifestyle and Affordability Leading Buyer Decisions
Brokers within the Loan Market network are also seeing more clients willing to relocate in pursuit of affordability and a better lifestyle. McQueen believes Australians are now more open to the idea of moving beyond traditional metro boundaries, embracing regions that were previously considered too remote.
State-by-State Differences Highlight Affordability Divide
Executive Chairman Sam White echoed these insights, pointing to continued strong interest in property despite uneven momentum across states. New South Wales and South Australia both saw a 24% rise in approvals, with Queensland following closely at 21%. Victoria’s subdued growth stood out in comparison.
White highlighted the challenges facing buyers in parts of Sydney and Melbourne, where the Reserve Bank’s rate hikes have dampened borrowing capacity. More affordable markets are currently benefiting from greater demand, with buyers prioritising value for money.
Interest Rate Cuts Yet to Fully Spark Demand
Barrenjoey banking analyst Jon Mott added that the broader housing market is still adjusting to recent interest rate movements. Despite expectations of improved conditions, loan approvals dipped by 4.5% in March. He expects further rate cuts from the RBA will enhance borrowing capacity and lead to a broader recovery in housing credit.
Loan Sizes on the Rise in Key States
The report also showed a sharp rise in the median size of approved loans in several states. Queensland has seen the biggest jump, with the average loan climbing from around $450,000 to over $600,000. Western Australia and South Australia have followed suit, with increases from $430,000 to $580,000, and $410,000 to $560,000 respectively. Victoria, in contrast, has remained relatively static at just above $500,000.
A New Outlook on Property and Investment
According to McQueen, the evolving landscape reflects not just financial considerations but a change in how Australians think about home ownership and investment. Buyers are expanding their horizons, often looking beyond traditional city limits in response to affordability pressures and lifestyle aspirations.
Brokers Playing a Key Role in a Fragmented Market
He emphasised the importance of brokers in today’s fragmented market. With conditions varying widely from one region to another, brokers are playing a crucial role in guiding borrowers through complex lending environments, helping them weigh up their options and secure competitive finance.
Rise of Non-Bank Lenders Fuelling Approvals
Alongside the surge in activity across various regions, the growing use of non-bank lenders is also playing a significant role in boosting overall loan approvals. As more borrowers turn to alternative lending options outside the traditional banks, access to finance has become easier for a broader range of applicants. These non-bank lenders often offer greater flexibility in their assessment criteria, which has helped many Australians secure finance who might have otherwise struggled under stricter bank lending rules. This shift in lending behaviour is contributing to the overall rise in loan approvals, as borrowers are finding more pathways to enter or re-enter the property market.
