Of the states and territories, Queensland accounted for most of the increase in lending for the purchase of property.
The value of housing finance commitments (excluding refinancing) increased 40.2 percent in Queensland over the September quarter, accounting for around 31 percent of the uplift in finance nationally.
This was followed by NSW, which contributed 30% to the uplift nationally, as the state saw a 16.7 percent increase.
Western Australia had the largest increase in housing finance for the purchase of property over the September quarter, rising over 55 percent.
This further supports the view that the WA and Perth dwelling markets are resuming an upswing following the disruption of Covid-19.
Despite extended restrictions on the transaction of property across Victoria for much of the quarter, the state still saw a 4 percent uplift in the value of finance for the purchase of property, which was entirely fuelled by owner-occupier purchases.
Finance secured for the purpose of investment property purchase fell -4.3 percent across the state in September.
ABS data suggests external refinancing came down 9.6 percent over the quarter, after an unprecedented peak in May. However, the value of external refinancing is still elevated and is 30.4% higher than in the September quarter of 2019.
As the RBA handed down a further reduction in bank funding costs over November, and mortgage rates continued to fall, refinancing should remain elevated.
But it is worth noting the vast majority of discounted funding costs for banks are being passed through to fixed-rate loan products.
The exit fees that can be associated with fixed-rate home loan arrangements may constrain refinance activity down the line, once a portion of the current wave of borrowers are locked into fixed-rate arrangements.
In the near term, CoreLogic estimates lending for the purchase of a property will continue to remain elevated due to loose monetary policy.
However, the steep increases in finance seen in recent months are unlikely to maintain such a strong trajectory, and quarterly growth rates in housing finance volumes are likely to slow as pent-up demand runs out of steam.