The aggressive rate hikes by the Reserve Bank of Australia have sent many Australian borrowers rushing to switch their lenders.

According to the Australian Bureau of Statistics, the value of owner-occupier refinancing between lenders increased 9.1% to reach a new high of $13.4bn in November.

Investor refinancing also increased in the month, hitting $6.01bn

A recent study by Great Southern Bank revealed that 94% of refinancers explored better home deals to manage increased costs of living amid rising interest rates.

The rising rates however seemed to have continued to affect the appetite of new borrowers.

Over the month, the total value of new loan commitments for housing fell 3.7% — both owner-occupier and investor segments recorded a decline.

November marked the 10th consecutive decline in housing lending, and is now back to January 2020 pre-pandemic levels.

ANZ senior economist Adelaide Timbrell said the RBA is likely to make three more rate hikes this year, which would push housing lending further in two main ways.

“Firstly, falling housing prices due to reduced borrowing capacity will lead to lower average loan sizes,” she said.

“Also, expected housing price declines generally reduce listings and transaction volumes, reducing the total flow of lending through fewer purchases.”

The impact was even greater for first-home buyers, whose segment reported a 5.5% decline in new loan commitments in the month.

First-home buyer loans ended the month 51% below their peak in January 2021.

“Despite a fall in housing prices of 8.4% since their peak in May 20221, first-home buyer lending has not increased through the year,” Ms Timbrell said.

Photo by khunkorn on Canva.