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Latest release

Lending indicators

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

Reference period
May 2020
Released
9/07/2020
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Key statistics

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

  • fell 11.6% for housing
  • rose 14.5% for personal fixed term loans
  • rose 3.6% for business construction

Important 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.

Identified data quality issues

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.

There are also issues with the reporting of credit card data in personal finance, mainly for new and increased credit limits, however the net impact of these issues is still being investigated. Some lenders are incorrectly reporting reactivated or replacements cards as new borrower accepted commitments, while other lenders are not reporting the full amount of a new borrower accepted commitment when a credit limit increase occurs.

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) impacts in May data

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 May. For housing, the number and value of loan commitments for existing dwellings fell strongly, reflecting restrictions in late March and April on open houses, auctions and people's mobility in general. The Reserve Bank of Australia's (RBA) term funding facility (TFF) has allowed lenders to offer attractive fixed rate loans, which have driven a sharp increase in refinancing commitments where customers change lender to refinance their home loan. May's rise in fixed term loan commitments for personal finance reflects a small bounce back in activity after April's sharp fall, which was due to COVID-19 impacts. Although the headline statistics about business loan commitments do not show obvious COVID-19 effects, lenders have reported commitments accepted by small and medium businesses due to the Commonwealth Government's Small and Medium Enterprise (SME) Guarantee Scheme, the values of which are significant in the context of lending to SMEs.

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

     May 2020
    $b
    Month percent change
    %
    Year percent change
    %
     
     Seasonally adjusted 
    Households   
     Housing
    16.42
    -11.6
    1.8
      Owner occupier (a)
    12.31
    -10.2
    7.3
      Investor (a)
    4.10
    -15.6
    -11.9
     Personal
     
     
     
      Fixed term loans
    1.43
    14.5
    -10.8
    Businesses
     
     
     
     Construction
    1.97
    3.6
    -26.0
     Purchase of property
    4.26
    -2.0
    -35.4
    a. Loan commitments for owner occupier, investor housing and personal fixed term loans exclude refinancing.
     

    Key graphs

    Due to the effects of COVID-19 the value of new loan commitments for housing experienced the largest monthly fall in the history of the series

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    Fixed term loan commitments for personal finance are at low levels despite a pick up in new loan commitments for road vehicles

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    Strength in the value of business loan commitments for dwelling construction drove the rise in construction during May but purchase of property fell reaching the lowest level in six months

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    Housing

    New loan commitments by purpose                          Seasonally adjusted
    May 2020
     
    Month percent change
    %
    Year percent change
    %
     Value ($b)  
    Owner occupier   
     Total housing (a)
    12.31
    -10.2
    7.3
      Construction of dwellings
    1.43
    -2.2
    12.6
      Purchase of newly erected dwellings
    1.65
    -4.1
    29.8
      Purchase of existing dwellings
    8.37
    -12.4
    3.4
     First home buyers
    3.71
    -10.5
    19.3
    Investor
     
     
     
     Total housing (a)
    4.10
    -15.6
    -11.9
     
    Number  
    Owner occupier   
     Total housing (a) (b)
    -
    -
    -
      Construction of dwellings
    3 144
    -3.2
    -3.3
      Purchase of newly erected dwellings
    3 321
    -3.8
    16.8
      Purchase of existing dwellings
    16 969
    -9.1
    -12.4
     First home buyers
    8 610
    -9.3
    4.4
    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 fell for both owner occupiers and investors during May. The value of new loan commitments accepted by investors reached its lowest level since November 2002.

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    May's fall in value of new loan commitments for the purchase of existing dwellings was the largest monthly fall in the series (which starts in July 2002)

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    The fall in owner occupier commitments in May was driven by New South Wales and Victoria. Falls were reported for all other states except ACT

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    The fall in new loan commitments for investors was driven by Victoria and New South Wales.

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    The value of loan commitments accepted by owner occupiers remains significantly higher than loan commitments accepted by investors

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    There was strong growth in the value of fixed interest rate loans funded in April and May driven by refinancing activity

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    *A loan is considered funded once any portion of the funds is made available for the borrower to draw down according to the terms of the contract. This will occur after there is a borrower-accepted commitment to provide finance.
     

    First home buyers

    In May 2020:

    • the number of owner occupier first home buyer loan commitments decreased 9.3% in seasonally adjusted terms
    • the number of first home buyer loan commitments for investment purposes accounted for 4.6% of all first home buyer commitments, in original terms
    • owner occupier first home buyer loan commitments accounted for 31.7% 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
    8 564
    36.6%
    31.7%
     New South Wales
    2 071
    31.4%
    27.2%
     Victoria
    3 079
    42.4%
    36.0%
     Queensland
    1 477
    34.4%
    30.3%
     South Australia
     468
    26.5%
    23.2%
     Western Australia
     996
    46.6%
    41.5%
     Tasmania
     156
    31.9%
    25.2%
     Northern Territory
     65
    44.8%
    40.6%
     Australian Capital Territory
     252
    35.4%
    32.6%
    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.
     

    New loan commitments for owner occupier first home buyers fell by a similar proportion to the overall fall in owner occupier commitments for dwellings.

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    NSW and Queensland drove the fall in the number of loan commitments accepted by owner occupier first home buyers. All other states except ACT recorded falls.

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

    Data downloads - time series spreadsheets

    Data quality note

    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.

    Data quality note applies to Table 3, Tables 5-13 and Tables 15-22.

    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

    Data quality note

    Please note that there are issues with the reporting of credit card data in personal finance, mainly for new and increased credit limits, however the net impact of these issues is still being investigated. Some lenders are incorrectly reporting reactivated or replacements cards as new borrower accepted commitments, while other lenders are not reporting the full amount of a new borrower accepted commitment when a credit limit increase occurs.

    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