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This is an opportunity for you to take a step back and make sure that your finances for your families in the best position possible. This same movement, the refinance boom, which has been and is occurring, was happening when COVID first happened. And this was the time where everyone's like, oh, wow, what's happening? Lockdowns, jobs, this, let's go review our finances. Let's make sure we're okay.
We don't know where this is going to go. It's the same motion here. And so it's an opportunity for you to speak to Lee, speak to her team and just go, I want to make sure we're all good. And if we're getting our rates here and they're not the prettiest, we're good customers. I want to make sure that someone else, if they can, can treat me better, look after me and my family, potentially look at equity releases, make sure you're okay.
Whatever the scenario is for your situation, it's really important to point that out because I do see a lot of families reach out to us and just go, hey, I'm not sure about what to do here. They said no, they said no. Well, there are some options here to say yes and ensure that you're not stretching yourself further. Actually aiding the scenario. I just want to take a moment to say that, Lee, and apologies for hijacking that.
I just wanted to make sure that people are in good hands and they understand that this is a time where your proactiveness puts you in a position to succeed or puts you in a position to hold the fort. And we just want to make sure that you're looked after from that perspective to know that for no cost, you get to sit down with someone, review your finances, ensure there's a better rate, ensure that you move where there's better flexibility for you, better loan terms without all this bank and policymaker bullcrap going behind the scenes about, no, it's 3%, no, I'll do 1%, that bank won't do anything, and we'll just do the hard work for you to find the right people and go from there. So yeah, that's it from there. But in terms of, Lee, the capacity and second and third tier lenders, you're noticing a lot of activity there. What's happening on that front?
Well, obviously, as rates go up, borrowing capacities with your major lenders are generally lesser in terms of how much you can afford. And so we're seeing clients who have the capacity or the want, I should say, to look at a higher budget are looking at your second or even third tier lenders to stretch that out to take advantage of the current climate to capitalize on an investment opportunity, whichever. And so more clients, if they have to go towards a second or third tier lender, which generally what that means is it's not a major bank. Some policies may be slightly lenient, especially in the case of third tier lenders, and they're generally third tier lenders are your non-bank type lenders. So people are swaying towards them to capitalize on opportunity for new purchases.
Yeah, good call out. And that just shows you the importance of the right broker in your side, because you can now go, hey, it's not just the big four, big five, it's what's the second tier, what's the third tier, how do I consider lending? I remember we went through this when we went back to what, 2019, 2020. It was our earlier years in business and we were transitioning and growing. COVID just hit.
And some banks say no, some banks said maybe, and then finally the third tier said, yeah, we'll give you money, mate. As long as you give us a huge deposit or as long as you show us every bit of paperwork here and there, and we're cool to do. But I guess the main thing is sometimes in these times, if you wish to have progression in your portfolio, you need to go to solution focused banks, you need to go to full reviews, you need to go to a broker rather than to bank. And it's moments like this that give a good review. Well, I'm going to bump in there is there's a cost of interest rate or maybe more deposit that you need to put in, but you need to weigh up the opportunity cost of missing out on a potential good investment.
If you were to wait another, I don't know, 12 months maybe or less for the rates to go back down and the market to start flying back up. So, yeah. Yeah, I think when you think about that, it's also important in the context of all this talk we've done about interest rates, refinances, higher repayments. Let's just take a step back and recognize one thing though. Markets all across Australia have been and are now recovering for the ones that were declining.
For the ones that were improving, they're improving even more. And so it's clear just on that note of the 12th consecutive rate rise, we're still looking back and seeing property prices come back into swing. So the point of mentioning that is that it's not so linear. Interest rate up, property price down. There's many other scenarios.
And so this is where sometimes those second tier and third tier banks come in and may provide you that solution to take advantage of certain conditions in the marketplace. So it's another key thing to remember and such a good point to bring up, Lee, because it just takes me back to our earlier days of starting our businesses and we needed to access those second tier and third tier lenders to keep scaling our portfolio. But yeah, that's the world of finance on tiers of banks, borrowing capacities, fixed rates, interest rates, and repayment shifts and all you need to know there. But on the finance front, Lee, how about we look at what's happening with ABS lending indicators? It's always good to take a bit of a national view on data points when it comes to housing finance.
Yep. So we're in June. It's always a little bit delayed. So April 2023 data has been released. Housing finance in April 2023 in seasonally adjusted terms for the value of new loan commitments.
The loan total housing fell by $23. 3 billion after a rise of 5. 3% in March. So that was 25. 8% lower compared to one year ago.
So that's total housing. For owner occupied housing, this fell by 3. 8% to $15. 4 billion and that was 24. 3% lower compared to one year ago.
And for investor housing, this fell by only 0. 9% to $7. 9 billion and that was 28. 6% lower compared to a year ago. So on average between sort of that 24 to 28.
6% less lending going around and flowing around in comparison to the year prior. So that's been pretty interesting. And Lee, I know refinancing is a hot topic, especially what we've mentioned earlier today on the whole dollar for dollar refinance, lowered assessment rates. That stuff has only been showing up in recent times, which means that there's still been a lot of people moving without that stuff and having very high assessment rates. What's the trends like in terms of the movements?
Because it's clear that looking at the stats you shared with me, there's a lot of higher than this time years ago showing. Yeah. So April, the value of external refinancing for total housing fell 9. 2% to $19. 3 billion.
That's after a record high of $21. 3 billion in March. Record high, which is interesting, like you said, and rates have been increasing since May last year. And so that was 14. 2% higher compared to one year ago.
Now that's a key statistic. So looking at that, that proves to us that yes, there's a little bit of pullback towards the tail end right now in terms of total refinancing. But on the whole grand scheme of the year versus the year, we've seen a 14. 2% increase in total refinancing. Clearly, in my opinion, this is the point that we raised some episodes ago, Lee, around how and why there wasn't any housing collapse imminent due to these rising rates.
It's because you have an ability to be proactive in finance. And this clearly shows Australians were and are proactive on their finances because we are sitting at 14. 2% higher values of refinancing, even though there is circa 40% reduction in borrowing capacities. So whilst people are fishing around for lower assessment rates, and they should, and they should be looking at that, there's a whole bunch of Aussies here saying, hey, look, I can still borrow, I can still move my loans around, I'm not stuck, because it was 14% higher than what we call a finance boom, and it was 14% higher than that in refinancing. So well done to all of you for staying proactive, looking at your numbers, getting into action, finding out ways to better your position, then of course, review opportunities and how you can go from there.
Now, that's a really good recap of finance, Lee. Thank you so much for sharing that. We've got some pretty cool insights to share on a bit of a hot spotting in terms of what's cracking around the marketplace. And South Australia has been a pretty interesting space, hasn't it, Lee? It's been very hot topic.
So South Australia's property market has been one of, if not the top performer across Australia for the past year. And so that brings us to the most recent white paper for yourself and Junge Ma, the research analyst at InvestorKit, for the recent released white paper in May, which was titled Five Top Performers in South Australia in 2023. So all the listeners, you can find this information that's completely free reporting that you can access on the InvestorKit website. So you just need to go to investikit. com.
au forward slash white papers. And there's a whole lot of free info for you to download and digest. But firstly, Arjun, how has SA stood out in comparison to other states in Australia since the beginning of 2022 up until now off the back of these 12 recent rate hikes? Yeah, so firstly, SA has been a big standout. And as we know, we just talked about earlier, the SA standout in price growth.
But at the same time, we talked about how interest rates are just not this clear piece of information where rate goes up, price goes down. Sure, at a national level may seem like that to some people in recent times, but there are many regions here that did the opposite. And most of South Australia, almost all of it grew in 2022. How cool, right? National data going backwards, but South Australia going higher.
Now, many people would remember me from episodes in 2020, 2021, even going back to 2019 and some data shared across smart property investment and a few other areas where we were saying, hey, watch out, Adelaide's coming, it's going to grow, South Australia's growing. And if you think of why that is, the simple answer is local supply conditions, local economy. And I know that's very simplified, but that's the truth. When you think of, hey, Arjun, how are you looking at this data and making sense of We just wanted to make sure we had some diversity in areas. We factored some regional, some major Adelaide.
And when you've got a top four or five list, it's extremely difficult to get enough spread. There were also some small towns, Lee, just to give a shout out, Port Pirie and some other surrounding small towns where the data was extremely strong. But again, just small population sizes, very, very low statistical relevance and weighting. We just felt like, hey, let's maybe exclude that in such a broad South Australia reports. But I want to give the love to everyone there that the data is obviously very strong in some of these areas.
So I think the main thing is just wanted to shout out to a few other areas and their price points as well. Awesome. And so with, I guess, from, I guess, an investor's point of view. So we've got Mount Gambier coming in the lowest median house price or price median price at 380K versus Adelaide Hills at the highest. And that's for a 650K median price.
What are the major differences you see in these two areas? And if you're an investor and you say you've got one or two properties already under your belt, but your total capacity, you're able to afford another 700, 750K investment purchase price currently. Would you go for two properties in Mount Gambier or one at a higher value in Adelaide Hills and why? Yeah, really good question. So this is the most it depends component of investing, right?
Like I take us back to 2020 when we invested in Bendigo. And I think when we look at it, we purchased a property for 380,000, which today's worth over 600,000, which is firstly unreal based on bank valuations. Now, looking back at that, we may have and could have probably gone for some different prices or maybe have told ourselves we've got a fair bit of property. Why not wait for bigger prices? At that time, that was also what happened to be the most budget we could do.
And so it's a decision for each investor to go, do I not invest versus do I do something? And if it's that tight because you cannot get more, then sometimes doing something can be very powerful. And that proved to be a very powerful decision rather than saying, hey, lockdowns are here. Don't do anything. Maybe just wait a bit.
Don't spend. Wait till you have a bigger budget. No, we got in and it benefited us. So if you're in that position where the budgets are a little bit, maybe not 500, can't do that. I would still look at taking action, in my opinion, just simply because the data's prone for growth there.
It's under rented, undersupplied and that aspect. Now, if you've got two properties and you've got an option for two and a bigger budget, coming back to your point there, I firstly want to look at your investor profile. Are you someone who's a less is more or more is more? Do you see pride and diversity and satisfaction by having seven places and different suburbs, cities, states and feel pretty good that way? Or do you look at it and go, look, that's too many roofs, kitchens, bathrooms and structures and sub floors for me to maintain.
And so that's the first part because the investor profile trumps the actual decision. Because if you're going to hold something and you get constantly annoyed with something and you now sell sooner than its long term averages of growth kicking in, you've just shot yourself in the foot, even though it could have been the right area, the right location, because these little things come in your mind and you just go, I don't want to do it. So investor profile first, how is that looking? Then the second thing is investor goal. If you now go, wow, three properties at 700K value each, debt free, in line with my profile in 20 years, sounds like me.
Well, there's no point cutting that into six properties because that is your profile matched with your goal. And then finally, you go to your outcome, your outcome being my profile, my goal and my outcome. My outcome here is I need slightly higher yields to get the banks across the line. So I may not have a choice but to split it into a couple. I need my outcome to be, you know, different cycle, different area, diversity, because I'm pretty stacked up in the state and I don't want to, you know, so it's a combination of outcome, goal and profile.
And that decides it. But if you just want pure performance and the data of an affordable area is slightly better, you have to remember, if you just buy one of those versus a 600, you have to have a 350 and say a 700 actually perform double to match the result. Because a 700K place at 5% growth is 35K, a 350K place to get the same 35K is 10%. So I wouldn't just buy one and sit back and go, I've got a great, affordable, high yielding location and it's so high growth and it's going to be great. Well, I could just get half the results as you just because I used my budget completely and I was able to get ahead.
Right. So you have to find the balance between two. And if your budget is 700 and you want to do two, just don't stop at one because you need double the growth to achieve the same person as someone at 700 who just did one and it was an OK decision. So I would say use up at all is the core factor and how you use it as a combination of investor profile, investor goal, and then the outcome that you need to move ahead. Awesome.
Was there any, I guess, data you wanted to comment around the difference of rental yields or anything like that? Yeah. Firstly, for anyone, I guess, keen to grab a copy, you can just jump on investikit. com. au and click on our research tab.
There's a white paper section and this is the top performance in South Australia in 2023. This is our thoughts here for what's happening. And South Australia is definitely a standout. Now, for some specific data sets to call out, Lee, I think you've already shared the areas. So no one's getting a bit of sizzle in this podcast like I tried to do last time.
Remember last time? Yeah, last time I think we gave two areas and we're like, oh, we're going to hide the rest and download to find out. Today, the sizzle's out. So no need to download it if you just wanted to know the areas. But I guess if you want to know the why, it's really important to check out some pretty cool stats.
And some of these stats that I've written, something I've been really enjoying has been our infrastructure per capita. I think you'll find a lot of value in that. And that's something many big city folk don't quite get. If you're in a big city and you have a lot of population and you see a large project, have you maybe thought that you're just meant to have a lot of infrastructure because you have a lot of people? It's a big city, more population.
So when you have that $5 billion huge tunnel coming, it's great, but it's meant to happen. So it's not something special. That same $5 billion, say, hospital or $2 billion hospital in a town of 50,000 people, huge per capita difference. So I'd encourage people to check out some of our per capita statistics and GRP growth and local economies of some of these regions. And the second data point that I find really exciting is really around when we look at the housing inventory and vacancy and the low supply, I'm just seeing so much undersupply in South Australia right now.
It's going to take a lot of distress. It's going to take a lot of people excited about gains and selling out on those gains. It's going to take a huge amount of construction, which, as we know, takes time. And so there is still merit in some of these locations, even with such growth, just because undersupply has not returned. Like there is no supply that's returned.
It's still very undersupply. And yes, the trend lines are changing a little bit, but that's a national trend line we're seeing of some supply bounce and listings in the market because we're seeing a little bit more confidence come in. But I think that's one core thing to share with everyone, because when you go back to Hobart, this is one of the biggest mistakes people made. In 2017, it had grown a fair bit. And everyone said, oh, it's done its thing.
Interest rates or maybe not interest rates. I think it was negative gearing at that time or APRA. It's over now. Then in 2018, it did its thing. Hobart's had its time.
Must be over now. And in 2019, it did its thing. Definitely no more growth left in Hobart. It's ship sailed there, mate. And I just see all these comments in the forums.
I see all these. It's just so incorrect when it comes to data interpretation. It will keep going if people are willing and able to pay that price. Sales volumes represents people's willingness and ableness, if ableness is a word, to make that price happen. It will keep going if there's no houses for sale, no houses for rent and no construction.
And it will keep going if the local economy is strong and continues to produce jobs and continues to produce new opportunities for new workers. So people need to take a step back and look at some of these trends and not just this isolated, it's done its thing. Because if you keep carrying that mindset, you're going to constantly sit back and watch the train fly by and watch the results fly by, the plane fly by, whatever you want to call it.
