Lending indicators

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

Reference period
April 2022
Released
3/06/2022

Key statistics

In April 2022 in seasonally adjusted terms, the value of new loan commitments:

  • fell 6.4% for housing
  • fell 3.7% for personal fixed term loans
  • fell 8.5% for business construction (a typically volatile series)
  • fell 4.7% for business purchase of property (a typically volatile series)

Value of new borrower-accepted loan commitments (seasonally adjusted)

  Apr-2022 ($b) Month percent change (%) Year percent change (%)
Households      
 Housing 30.99 -6.4 0.3
  Owner Occupier (a) 19.91 -7.3 -12.8
  Investor (a) 11.08 -4.8 37.1
 Personal      
  Fixed term loans 2.19 -3.7 18.0
Businesses      
 Construction 2.21 -8.5 12.7
 Purchase of Property 6.06 -4.7 10.3

(a) Loan commitments for owner occupier, investor housing and personal fixed term loans exclude refinancing.

Important data quality notes

2022 review of seasonal adjustment factors

In the April 2020 Lending Indicators release, the ABS advised that the method used to produce seasonally adjusted estimates would be changed from the "concurrent" method to the "forward factors" method, during the COVID-19 period. The forward factors approach is better suited to managing large movements at the end point of series and ensures that large movements do not have a disproportionate influence on the seasonal factors.

Given disruption to typical lending patterns in the wake of COVID-19 and the continuing use of a forward factors approach to seasonal adjustment, the ABS annually undertakes an extensive review of its seasonally adjusted Lending Indicators series. This is part of similar reviews that are regularly undertaken across the ABS economic statistics program. A review was recently conducted and its results have been implemented in the April 2022 Lending Indicators release, with new static forward factors for the 12 months from this date being calculated through the review process.

The review identified a range of time series treatments to ensure that the seasonal adjustment process continues to be less influenced by the large month-to-month movements over the past two years, and more informed by seasonality before the COVID period. Revisions to most seasonally adjusted series are therefore relatively minor but larger than would be observed through the use of concurrent seasonal adjustment (which was used prior to the COVID period, with revisions progressively made each month).

Further information can be found here:

https://www.abs.gov.au/articles/methods-changes-during-covid-19-period

All seasonally adjusted Lending Indicators series will continue to use the forward factors method for the foreseeable future and are expected to return to using concurrent adjustment when the risk of disruption from COVID-19 becomes sufficiently low.

April 2022 seasonal adjustment

In original terms, loan commitments usually fall in April due to Easter and ANZAC day public holidays reducing the number of working days. This is accounted for when seasonally adjusting the data. Lenders partly attributed the fall in April 2022 to the close proximity of Easter and ANZAC day public holidays, which softened borrower demand and limited loan processing more than would usually occur in the month of April. The seasonal adjustment process may indicate revisions are appropriate in coming months.

Suspension of trend series

The trend series attempts to measure underlying behaviour in lending activity. In the short term, this measurement has been significantly affected by changes to regular patterns in lending that have occurred during this time, for example as potential home buyers face uncertainty about their job security. If the trend estimates in this publication were to be calculated without fully accounting for such irregular events, 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.

Treatment of Buy Now Pay Later products in Personal finance

The ABS has identified some inconsistencies in how Buy Now Pay Later (BNPL) loan products are being reported. We are working with APRA, the Reserve Bank and lenders to ensure reporting aligns with reporting guidance and definitions, and is consistent across different lenders. Revisions to Personal finance data are expected when this is resolved.

     

Housing finance

In April 2022 in seasonally adjusted terms, the value of new loan commitments:

  • for total housing fell 6.4% to $31.0b, following a rise of of 2.1% in March
  • for owner-occupier housing fell 7.3% to $19.9b, the largest fall since May 2020
  • for investor housing fell 4.8% to $11.1b, after 9 consecutive months of growth since June 2021

In April 2022 in seasonally adjusted terms, the value of external refinancing:

  • for total housing fell 2.6% but was 19.2% higher compared to a year ago
  • for owner-occupier housing fell 0.2% but was 23.6% higher compared to a year ago
  • for investor housing fell 7.3% but was 10.8% higher compared to a year ago

Personal finance

In April 2022 in seasonally adjusted terms, the value of new loan commitments:

  • for total fixed term personal finance fell 3.7%
  • for personal investment fell 20.6%
  • for the purchase of road vehicles fell 6.7%

Business finance

In April 2022 in seasonally adjusted terms, the value of new loan commitments:

  • for total construction finance fell 8.5%, after a rise of 27.4% in the previous month
  • for the purchase of property fell 4.7%, the third consecutive month of falls

Housing finance (detailed)

New loan commitments by purpose (seasonally adjusted)

  Apr-2022 Month percent change Year percent change
Value ($b) (%) (%)
 Owner occupier      
  Total housing (a) 19.91 -7.3 -12.8
   Construction of dwellings 2.10 -3.5 -34.7
   Purchase of newly erected dwellings 1.09 -12.8 -29.5
   Purchase of existing dwellings 15.43 -7.2 -6.5
  First home buyers 4.73 -6.2 -29.7
 Investor      
  Total housing (a) 11.08 -4.8 37.1
       
Number (No.) (%) (%)
 Owner occupier      
  Total housing (a) (b)      
   Construction of dwellings 3 937 -2.0 -45.6
   Purchase of newly erected dwellings 1 865 -13.3 -34.6
   Purchase of existing dwellings 24 498 -5.8 -14.8
  First home buyers 9 916 -4.4 -34.3
 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.

 

In April 2022 in seasonally adjusted terms, the value of new loan commitments:

  • to owner-occupiers fell 7.3%, the largest monthly fall since May 2020
  • to investors fell 4.8%, the first fall since June 2021

  

In April 2022 in seasonally adjusted terms for owner-occupier housing, the value of new loan commitments:

  • for the purchase of existing dwellings fell 7.2% and was 6.5% lower compared to a year ago
  • for the purchase of new dwellings fell 12.8% and was 29.5% lower compared to a year ago
  • for the construction of new dwellings fell 3.5% and was 34.7% lower compared to a year ago

(a) For periods prior to July 2019, statistics about owner occupier commitments for residential land are modelled using data about the total value of  commitments for residential land.

* Hide/unhide series in the graph by clicking the legend above (toggle the 'purchase of existing dwellings' series for a closer look at the other purposes of owner occupier lending).

 

In April 2022 in seasonally adjusted terms for owner-occupier housing, the value of new loan commitments:

  • in New South Wales fell 12.6%, in Victoria fell 9.7%, in Queensland fell 2.4%, in Western Australia fell 3.6%, in the Australian Capital Territory fell 6.9%, in South Australia fell 1.2% and in the Northern Territory fell 5.3%
  • in Tasmania rose 5.7%

  

In April 2022 in seasonally adjusted terms for investor housing, the value of new loan commitments:

  • in Queensland fell 17.2%, in New South Wales fell 8.3%, in Victoria fell 5.3%, in Western Australia fell 3.2%, in Tasmania fell 14.8%, in South Australia fell 1.1% and in the Northern Territory fell 2.2%
  • in the Australian Capital Territory rose 4.3%

In April 2022, in original terms:

  • the value of new variable rate loan commitments funded in the month fell 5.0%
  • the value of new variable rate loan commitments to first home buyers funded in the month rose 5.4%
  • the value of new fixed rate loan commitments funded in the month fell 32.0%
  • the value of new fixed rate loan commitments to first home buyers funded in the month fell 20.6%

*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.

**Total Fixed rate and Total Variable rate housing loans include first home buyer loans

In April 2022 in original terms, average loan sizes for owner-occupier dwellings (which includes construction and the purchase of new and existing dwellings):

  • rose 1.9% at the national level from $600k to $611k. Average loan sizes have, in general, continued to increase despite a recent moderation in owner-occupier lending activity. This reflects a larger decline in the number of loan commitments relative to their value.
  • rose in New South Wales, in Western Australia, in Queensland, in Victoria and in South Australia
  • fell in Tasmania

*Please note that while the series graphed above are joined between the available data points, there may be missing data points in between which are not available for publication

First home buyers

In April 2022 in seasonally adjusted terms for owner-occupier first home buyers, the number of new loan commitments:

  • fell 4.4% at the national level and was 34.3% lower compared to a year ago

  • in Victoria fell 10.1%, in New South Wales fell 11.4%, in Western Australia fell 3.4%, in Tasmania fell 8.4%, in the Northern Territory fell 12.9%, in the Australian Capital Territory fell 1.1% and in South Australia fell 0.3%

  • in Queensland rose 5.1%

Additional information

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 (original), number

  First home buyer loan commitments
Number
First home buyer ratio
Dwellings (a)
First home buyer ratio
Housing (b)
Total Australia 8 975 31.5% 26.8%
 New South Wales 2 014 28.1% 23.6%
 Victoria 2 724 34.3% 29.7%
 Queensland 1 867 30.7% 25.7%
 South Australia 498 25.0% 20.2%
 Western Australia 1 440 38.4% 33.7%
 Tasmania 136 25.2% 19.8%
 Northern Territory 47 21.9% 19.4%
 Australian Capital Territory 249 32.7% 29.5%

(a) Dwellings includes loan commitments for construction of dwellings, purchase of newly erected dwellings and purchase of existing dwellings.

(b) Housing includes loan commitments for dwellings, purchase of residential land and for alterations and additions.

  

Data downloads

Housing Finance - Total

Data files

   

Housing Finance - Owner-occupiers

Data files

   

Housing Finance - Investors

Data files

  

Housing Finance - First home buyers

Data files

    

Table 26. Households; Housing finance; Non-residents; New loan commitments; Numbers and values

   

Personal Finance

Data files

   

Business Finance

Data files

Data cubes

Series ID concordance mapping

Previous catalogue number

This release previously used catalogue number 5601.0.

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