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Lending indicators

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

Reference period
February 2022
Released
1/04/2022

Key statistics

In February 2022 in seasonally adjusted terms, new loan commitments:

  • fell 3.7% for housing
  • rose 6.5% for personal fixed term loans
  • fell 40.2% for business construction (a typically volatile series)

New borrower-accepted loan commitments (seasonally adjusted)

 Feb-2022 ($b)Month percent change (%)Year percent change (%)
Households   
 Housing32.28-3.712.6
  Owner Occupier (a)21.53-4.7-1.0
  Investor (a)10.75-1.855.8
 Personal   
  Fixed term loans2.306.528.9
Businesses   
 Construction2.30-40.2-9.4
 Purchase of Property7.56-3.056.0

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

Important data quality note

Upcoming Housing finance revisions

Recently introduced reporting changes will result in revisions to Housing finance series.

A reporting threshold determines the inclusion of lending institutions in the data APRA collects on behalf of the ABS and RBA. The threshold for Housing finance reporting was recently reduced, resulting in a number of new entities reporting data for the first time. This data has been excluded from Lending Indicators for the time being. 

Separately, reporting improvements are being made by some lenders which will result in changes to the classification of owner-occupier versus investor loan commitments within Housing finance. 

Revisions from these two reporting changes will be implemented in the March 2022 release of Lending Indicators. These revisions will generally appear as small level changes and will extend back to September 2021. Levels of owner-occupier commitments will decrease slightly while those of investor commitments will increase slightly. The revisions are not expected to significantly change previously published series movements or general patterns of loan commitment activity.

Seasonal adjustment methods

Upcoming 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. The results of the last Lending Indicators review were implemented in the April 2021 release, with static forward factors for the 12 months from that date being calculated through the review process. The next review will be conducted soon and its results will be implemented in the April 2022 release.

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. 

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.

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.

Business finance: purchase of property series

The Business finance series for the purchase of property for total and for large-sized businesses have resumed publication this month following the resolution of reporting errors. Revisions have been implemented across these and other Business finance series. 

     

Housing finance

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

  • for total housing fell 3.7% to $32.3b but was 12.6% higher compared to a year ago
  • for owner-occupier housing fell 4.7% to $21.5b and was 1.0% lower compared to a year ago. It was 55% higher than pre-COVID levels in February 2020.
  • for investor housing fell 1.8%, the first fall since October 2020. It remained close to the record high seen in the previous month.

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

  • for total housing rose 8.6% and was 14.7% higher compared to a year ago
  • for owner-occupier housing rose 11.0% after a fall of 11.0% in the previous month
  • for investor housing rose 4.2% and was 12.4% higher compared to a year ago

Personal finance

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

  • for fixed term personal finance rose 6.5%
  • for the purchase of road vehicles rose 10.8%
  • for personal investment rose 0.8%

Business finance

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

  • for total construction finance fell 40.2% after a rise of 41.6% in the previous month
  • for the purchase of property fell 3.0% after a rise of 11.0% in the previous month. This series has resumed publication this month following the resolution of reporting errors.
  • for the purchase of property grew 137% since the recent low in July 2020, driven by lending to small and medium-sized businesses. The largest growth over this time has been in lending for the purchase of non-residential buildings which grew 118% ($972m).

Housing finance (detailed)

New loan commitments by purpose (seasonally adjusted)

  Feb-2022 Month percent change Year percent change
Value ($b) (%) (%)
 Owner occupier      
  Total housing (a) 21.53 -4.7 -1.0
   Construction of dwellings 2.24 3.1 -47.1
   Purchase of newly erected dwellings 1.26 -7.2 -15.5
   Purchase of existing dwellings 16.62 -6.2 16.0
  First home buyers 4.85 -9.7 -29.0
 Investor      
  Total housing (a) 10.75 -1.8 55.8
       
Number (No.) (%) (%)
 Owner occupier      
  Total housing (a) (b)      
   Construction of dwellings 4 354 2.8 -56.8
   Purchase of newly erected dwellings 2 251 -0.4 -23.6
   Purchase of existing dwellings 26 148 -7.0 -1.3
  First home buyers 9 994 -8.3 -36.7
 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 February 2022 in seasonally adjusted terms, the value of new loan commitments:

  • to owner-occupiers fell 4.7%, the first fall since October 2021
  • to investors fell 1.8%, breaking 15 months of consecutive growth

  

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

  • for the purchase of existing dwellings fell 6.2%, driving the majority of the fall in the value of total owner-occupier loan commitments
  • for the purchase of new dwellings fell 7.2% and was 15.5% lower compared to a year ago
  • for the construction of new dwellings rose 3.1% but was 47.1% 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 February 2022 in seasonally adjusted terms for owner-occupier housing, the value of new loan commitments:

  • in New South Wales fell 10.5%, in Victoria fell 5.2%, in the Australian Capital Territory fell 23.6%, in Queensland fell 3.0%, in South Australia fell 7.6% and in the Northern Territory fell 7.2%
  • in Western Australia rose 0.6% and in Tasmania rose 2.5%

  

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

  • in New South Wales fell 5.5%, in Queensland fell 2.6%, in the Australian Capital Territory fell 11.9%, in South Australia fell 4.8% and in the Northern Territory fell 33.6% (a smaller, more volatile series)
  • in Victoria was flat (0%)
  • in Western Australia rose 6.8% and in Tasmania rose 2.8%

In February 2022, in original terms:

  • the value of new variable rate loan commitments funded in the month rose 12.2%
  • the value of new fixed rate loan commitments funded in the month fell 17.0%

The first home buyers series for this data have not been published this month while we work through reporting changes made by some lenders.

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

  • fell 3.9% at the national level from $620k to $596k
  • fell in New South Wales, in Victoria, in South Australia and in the Australian Capital Territory
  • rose in Tasmania, in Queensland, in the Northern Territory and in Western Australia

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

  • fell 8.3% at the national level, and fell across all states and territories

  • in New South Wales fell 15.5%, in Victoria fell 5.9%, in the Australian Capital Territory fell 31.9%, in Western Australia fell 4.6%, in South Australia fell 10.3%, in Queensland fell 3.3%, in the Northern Territory fell 9.5% and in Tasmania fell 0.6%

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 8 821 31.1% 26.3%
 New South Wales 1 817 26.8% 22.3%
 Victoria 2 865 34.7% 29.9%
 Queensland 1 783 29.1% 24.1%
 South Australia 520 25.8% 20.9%
 Western Australia 1 449 37.3% 32.8%
 Tasmania 175 33.5% 26.8%
 Northern Territory 47 23.3% 20.0%
 Australian Capital Territory 165 28.5% 24.3%

(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.