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Lending indicators

This release is about new borrower-accepted finance commitments for housing, personal and business loans

Reference period
April 2020
Released
10/06/2020

Key statistics

In April 2020, new loan commitments (seasonally adjusted):

  • fell 4.8% for housing
  • fell 24.8% for personal fixed term loans
  • fell 39.2% for business construction (typically volatile series).

Data quality note

From July 2019 onwards, data in this publication has been sourced from the Economic and Financial Statistics (EFS) collection, a new and improved data source. There have been extensive and ongoing discussions with lenders about the EFS collection. Data quality is expected to continue to improve over time, as lenders become accustomed to the new reporting basis and further refine the data they report. This process is likely to lead to revisions, including to the historical time series.

Please note that specific data quality issues have been identified with the reporting of detailed housing loan purpose categories, particularly for loan commitments for the purchase of newly erected dwellings. Some loan commitments for the purchase of existing dwellings are being incorrectly reported as being for the purchase of newly erected dwellings. The magnitude of misreporting for this issue is still being investigated.

Lender type breakdowns

Lender type breakdowns for Major banks, Other Authorised Deposit-taking Institutions (ADIs) and Non-ADIs are only available in this publication from July 2019 onwards. It is likely that more information about lender-type breakdowns will become available in the coming months.

Coronavirus (COVID-19) in April

The World Health Organisation (WHO) commenced daily situation reports of the coronavirus (COVID-19) outbreak on 21 January 2020 and identified it as an international health emergency on 30 January. From 1 February, the Australian Government placed travel restrictions on those travelling to Australia from mainland China. In March, regulations to encourage social distancing saw further impacts on the ability of businesses to trade as normal, and restricted mass public gatherings such as open houses or auctions.

There were uneven COVID-19 effects on housing loan commitments in April. For housing, because lenders are processing high volumes of refinancing and repayment holiday activity, April loan commitments largely reflected loan applications submitted in March before major restrictions were introduced. The fall in loan commitments for personal finance was due to COVID-19 impacts and reflects the shorter approval process for this category of lending. There were no obvious impacts on business loan commitments statistics included in this publication, reflecting the longer approval process for this category of lending.

The ABS and APRA are also actively managing the potential risks from COVID-19 to data collection operations. The ABS appreciates the support of APRA and lending institutions in continuing to provide the data used to compile this publication.

    Suspension of trend series

    The trend series attempts to measure underlying behaviour in lending activity. In the short term, this measurement will be significantly affected by changes to regular patterns in lending that will occur during this time, as potential home buyers face uncertainty about their job security, for example. If the trend estimates in this publication were to be calculated without fully accounting for this irregular event, they would likely provide a misleading view of underlying lending activity.

    It may be some time before the underlying trend in lending activity can be accurately estimated. The Lending Indicators trend series have therefore been suspended starting from March 2020. The trend series will be reinstated when more certainty emerges in the underlying trend in lending.

    Update to seasonal adjustment methods

    Lending Indicators uses the concurrent seasonal adjustment method, meaning that seasonal factors are re-estimated each time a new data point becomes available. If not appropriately accounted for, unusual real-world events, such as COVID-19, can distort estimates calculated using this method. From April 2020, seasonal factors are being calculated using data up to and including March 2020, then projected from April 2020 onwards. This approach, known as the forward factor method, ensures that the seasonal factors are not distorted by COVID-19 impacts.

      New loan commitments

       April 2020
      $b
      Month percent change
      %
      Year percent change
      %
        Seasonally adjusted 
      Households   
       Housing
      18.57
      -4.8
      11.2
        Owner occupier (a)
      13.71
      -5.0
      14.8
        Investor (a)
      4.86
      -4.2
      2.4
       Personal
       
       
       
        Fixed term loans
      1.25
      -24.8
      -23.9
      Businesses
       
       
       
       Construction
      1.90
      -39.2
      0.3
       Purchase of property
      4.35
      -7.0
      -22.5
      a. Loan commitments for owner occupier and investor housing exclude refinancing.

       

      Key graphs

      A backlog of demand has moderated falls in March and April as lending institutions face processing delays due to COVID-19

      Download


       

      Fixed term loan commitments for personal finance displayed the largest fall in the history of the series, driven by a fall in lending for road vehicles

      Download


       

      Business finance fell for both construction and the purchase of property, however there were no obvious COVID-19 impacts

      Download

      Housing

      New loan commitments by purpose Seasonally adjusted 
      April 2020Month percent change
      %
      Year percent change
      %
       Value ($b)  
      Owner occupier   
       Total housing (a)
      13.71
      -5.0
      14.8
        Construction of dwellings
      1.46
      2.0
      18.3
        Purchase of newly erected dwellings
      1.72
      -2.4
      32.0
        Purchase of existing dwellings
      9.56
      -6.6
      11.7
       First home buyers
      4.15
      -1.9
      34.5
      Investor
       
       
       
       Total housing (a)
      4.86
      -4.2
      2.4
       Number
      Owner occupier   
       Total housing (a) (b)
      -
      -
      -
        Construction of dwellings
      3 249
      2.9
      1.6
        Purchase of newly erected dwellings
      3 452
      -0.1
      21.6
        Purchase of existing dwellings
      18 665
      -6.3
      -5.0
       First home buyers
      9 491
      -3.8
      15.6
      Investor
       
       
       
       Total housing (a) (b)
      -
      -
      -
      a. Housing includes loan commitments for dwellings, purchase of residential land and for alterations and additions.
      b. There is no seasonally adjusted or trend data available for the number of owner occupiers or investors for total housing as the data was collected from July 2019.


      The value of new loan commitments for both owner occupiers and investors displayed the largest fall in twelve months

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      The purchase of existing dwellings experienced the largest fall in over a decade

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      The fall in owner occupier commitments was driven by Queensland followed by Western Australia during April 2020

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      The fall in new loan commitments for investors was largely driven by Queensland, offset by Victoria's rise. All other States fell except NT's small rise.

      Download


      Loan commitments to investors remain lower than owner occupiers for all major categories

      Download

      First home buyers

      In April 2020:

      • the number of owner occupier first home buyer loan commitments decreased 3.8% in seasonally adjusted terms
      • the number of first home buyer loan commitments for investment purposes accounted for 4.3% of all first home buyer commitments, in original terms
      • owner occupier first home buyer loan commitments accounted for 32.0% of all owner occupier commitments (excluding refinancing), in original terms
         

      Previously, the ABS published a first home buyer ratio which was the ratio of owner occupier first home buyer loan commitments to all owner occupier loan commitments. The table below presents two owner occupier first home buyer ratios.

      • The first ratio is the ratio of first home buyer loan commitments to total dwelling commitments (excluding refinancing). This is similar to the ratio published prior to October 2019. Loan commitments for dwellings is the sum of loan commitments for construction of dwellings, newly erected dwellings and existing dwellings.
      • The second ratio is a new ratio, the ratio of first home buyer loan commitments to total housing loan commitments (excluding refinancing). This ratio uses the new key statistic, total housing loan commitments. Total housing loan commitments is the sum of loan commitments for dwellings and loan commitments for purchases of residential land and alterations and additions.
         

      First home buyer ratios should be used with caution because the direction of movements in the ratio are often not indicative of the direction of movement in the number of first home buyers. First home buyer ratios are no longer routinely published by the ABS in the time series spreadsheets.

      The table below does not include first home buyer loan commitments for investors. Information about the number of loan commitments for investors is new and is separately presented in a graph below.

      New loan commitments
      to owner occupier first
      home buyers (number)
       Original 
      First home buyer
      loan commitments
      Number (a)
      First home
      buyer ratio
      Dwellings (b)
      First home
      buyer ratio
      Housing (c)
      Total Australia
      8 777
      36.7%
      32.0%
       New South Wales
      2 332
      33.1%
      28.9%
       Victoria
      3 017
      42.4%
      35.8%
       Queensland
      1 501
      34.3%
      30.3%
       South Australia
       483
      26.7%
      23.6%
       Western Australia
      1 002
      45.9%
      41.3%
       Tasmania
       172
      30.9%
      25.0%
       Northern Territory
       61
      40.4%
      36.5%
       Australian Capital Territory
       209
      32.3%
      30.4%
      a. Number of owner occupier first home buyer loan commitments includes purchase of residential land.
      b. Number of owner occupier first home buyers as a percentage of total owner occupied dwelling commitments by state.
      c. Number of owner occupier first home buyers as a percentage of total owner occupied housing commitments by state.


      Despite April's fall in new commitments for owner occupier first home buyers, the series remain up 20.2% on the most recent low point in December 2018

      Download


      Queensland and Western Australia drove the fall in owner occupier first home buyers during April

      Download
      Download
      Download

      * Investor first home buyers (number) for Tas and NT are not available for publication

      Data downloads - time series spreadsheets

      Table 1. Households ; housing finance ; total housing ; by property purpose ; new loan commitments ; values

      Table 2. Households ; housing finance ; total housing ; by property purpose ; by lender type ; new loan commitments ; values

      Table 3. Households ; housing finance ; owner occupiers ; by detailed purpose ; new loan commitments ; numbers and values

      Table 4. Households ; housing finance ; owner occupiers ; total housing excluding refinancing ; by state ; new loan commitments ; numbers and values

      Table 5. Households ; housing finance ; owner occupiers ; by detailed purpose ; new loan commitments ; New South Wales ; numbers and values

      Table 6. Households ; housing finance ; owner occupiers ; by detailed purpose ; new loan commitments ; Victoria ; numbers and values

      Table 7. Households ; housing finance ; owner occupiers ; by detailed purpose ; new loan commitments ; Queensland ; numbers and values

      Table 8. Households ; housing finance ; owner occupiers ; by detailed purpose ; new loan commitments ; South Australia ; numbers and values

      Table 9. Households ; housing finance ; owner occupiers ; by detailed purpose ; new loan commitments ; Western Australia ; numbers and values

      Table 10. Households ; housing finance ; owner occupiers ; by detailed purpose ; new loan commitments ; Tasmania ; numbers and values

      Table 11. Households ; housing finance ; owner occupiers ; by detailed purpose ; new loan commitments ; Northern Territory ; numbers and values

      Table 12. Households ; housing finance ; owner occupiers ; by detailed purpose ; new loan commitments ; Australian Capital Territory ; numbers and values

      Table 13. Households ; housing finance ; investors ; by detailed purpose ; new loan commitments ; numbers and values

      Table 14. Households ; housing finance ; investors ; total housing excluding refinancing ; by state ; new loan commitments ; numbers and values

      Table 15. Households ; housing finance ; investors ; by detailed purpose ; new loan commitments ; New South Wales ; numbers and values

      Table 16. Households ; housing finance ; investors ; by detailed purpose ; new loan commitments ; Victoria ; numbers and values

      Table 17. Households ; housing finance ; investors ; by detailed purpose ; new loan commitments ; Queensland ; numbers and values

      Table 18. Households ; housing finance ; investors ; by detailed purpose ; new loan commitments ; South Australia ; numbers and values

      Table 19. Households ; housing finance ; investors ; by detailed purpose ; new loan commitments ; Western Australia ; numbers and values

      Table 20. Households ; housing finance ; investors ; by detailed purpose ; new loan commitments ; Tasmania ; numbers and values

      Table 21. Households ; housing finance ; investors ; by detailed purpose ; new loan commitments ; Northern Territory ; numbers and values

      Table 22. Households ; housing finance ; investors ; by detailed purpose ; new loan commitments ; Australian Capital Territory ; numbers and values

      Table 23. Households ; housing finance ; first home buyers ; by state ; new loan commitments ; numbers and values

      Table 24. Households ; housing finance ; first home buyers ; owner occupiers ; by state ; new loan commitments ; numbers and values

      Table 25. Households ; housing finance ; first home buyers ; investors ; by state ; new loan commitments ; numbers and values

      Table 26. Households ; housing finance ; non-residents ; new loan commitments ; numbers and values

      Table 27. Households ; personal finance ; fixed term loans ; by purpose ; new loan commitments ; values

      Table 28. Households ; personal finance ; revolving credit ; new loan commitments ; values

      Table 29. Businesses ; business finance ; finance leases ; by purpose ; new loan commitments ; values

      Table 30. Businesses ; business finance ; fixed term loans ; by purpose ; new loan commitments ; values

      Table 31. Businesses ; business finance ; fixed term loans ; small business size ; by purpose ; new loan commitments ; values

      Table 32. Businesses ; business finance ; fixed term loans ; small business size ; by State ; new loan commitments ; values

      Table 33. Businesses ; business finance ; fixed term loans ; medium business size ; by purpose ; new loan commitments ; values

      Table 34. Businesses ; business finance ; fixed term loans ; medium business size ; by State ; new loan commitments ; values

      Table 35. Businesses ; business finance ; fixed term loans ; large business size ; by purpose ; new loan commitments ; values

      All time series spreadsheets

      Data downloads - data cubes

      Series ID concordance mapping