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Lending indicators

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

Reference period
January 2022
Released
1/03/2022

Key statistics

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

  • rose 2.6% for housing
  • rose 0.8% for personal fixed term loans
  • rose 41.6% for business construction (typically volatile series)

New borrower-accepted loan commitments (seasonally adjusted)

 Jan-2022 ($b)Month percent change (%)Year percent change (%)
Households   
 Housing33.662.618.2
  Owner Occupier (a)22.691.03.4
  Investor (a)10.976.167.8
 Personal   
  Fixed term loans2.150.821.6
Businesses   
 Construction3.8441.6192.3
 Purchase of PropertyNPNPNP

(a) Loan commitments for owner occupier, investor housing and personal fixed term loans exclude refinancing.
NP: Not published due to reporting issues. See data quality notes below.

Important data quality note

Seasonal adjustment methods

Recent 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 the disruption to the lending market during the COVID-19 period and the continuing use of a forward factors approach to seasonal adjustment, the ABS recently undertook an extensive annual review of its seasonally adjusted Lending Indicators series. This review followed similar reviews that are progressively being undertaken across the ABS economic statistics program. The results of the Lending Indicators review were implemented in the April 2021 release.

Static forward factors for the next 12 months were calculated through the review process and were used in the April 2021 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.

Business finance: purchase of property series

The Business finance series for the purchase of property for total and large-sized businesses have not been published this month. Reporting errors were identified in these series. The ABS is working with APRA and data providers to resolve the reporting errors as quickly as possible.

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.

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. It will be incorporated following analysis and quality assurance. This may result in some revisions to Housing finance series.

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. The ABS is working with APRA and the lenders to understand the impacts, and will implement revisions to these series when the reporting changes are applied in the coming months. Due to current impacts on loans funded in the month data from these reporting changes, the first home buyer series for new variable and fixed rate loans funded in the month has not been shown in the graph below.

     

Housing finance

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

  • for total housing rose 2.6% to a record high of $33.7b, which was 18.2% higher compared to a year ago
  • for investor housing rose 6.1% to a record high of $11.0b, driving the rise in total new housing loan commitments
  • for owner-occupier housing rose 1.0% to $22.7b

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

  • for total housing fell 8.6% (-$1.3b) but was 18.7% higher compared to a year ago
  • for owner-occupier housing fell 9.9% (-$1.0b) but was 19.4% higher compared to a year ago
  • for investor housing fell 6.3% (-$342m) but was 17.5% higher compared to a year ago

Personal finance

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

  • for fixed term personal finance rose 0.8% 
  • for the purchase of road vehicles rose 0.9%
  • for personal investment fell 2.2%
  • for the purchase of household and personal goods rose 19.3%

Business finance

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

  • for total construction finance rose 41.6%, after a rise of 66.6% in the previous month

The purchase of property series has not been published this month, as per the note above.

Housing finance (detailed)

New loan commitments by purpose (seasonally adjusted)

  Jan-2022 Month percent change Year percent change
Value ($b) (%) (%)
 Owner occupier      
  Total housing (a) 22.69 1.0 3.4
   Construction of dwellings 2.19 -3.6 -45.8
   Purchase of newly erected dwellings 1.36 0.3 -5.7
   Purchase of existing dwellings 17.79 2.3 20.0
  First home buyers 5.39 -5.0 -23.8
 Investor      
  Total housing (a) 10.97 6.1 67.8
       
Number (No.) (%) (%)
 Owner occupier      
  Total housing (a) (b)      
   Construction of dwellings 4 351 -4.8 -55.6
   Purchase of newly erected dwellings 2 260 -8.0 -22.2
   Purchase of existing dwellings 28 241 1.8 5.5
  First home buyers 10 964 -6.9 -32.6
 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.

 

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

  • to owner-occupiers rose 1.0%, the third consecutive monthly rise after falls from June 2021 through to October 2021
  • to investors rose 6.1%, the fifteenth consecutive month of growth. The value of these commitments reached $11.0b, surpassing the record high set in the previous month.

  

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

  • for the purchase of existing dwellings rose 2.3%, driving the majority of the rise in the value of total owner-occupier loan commitments
  • for the purchase of new dwellings rose 0.3% but was 5.7% lower compared to a year ago
  • for the construction of new dwellings fell 3.6% and was 45.7% 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 January 2022 in seasonally adjusted terms for owner-occupier housing, the value of new loan commitments:

  • in New South Wales rose 3.3%, in Victoria rose 3.2% and in the Australian Capital Territory rose 33.5%, driving the overall rise in owner-occupier loan commitments
  • in South Australia rose 3.6% and in the Northern Territory rose 11.2%
  • in Queensland fell 2.4%, in Western Australia fell 1.4% and in Tasmania fell 5.3%

  

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

  • in New South Wales rose 9.8%, in Victoria rose 11.1% and in the Australian Capital Territory rose 22.8%, driving the overall rise in investor loan commitments
  • in Western Australia rose 2.3% and in the Northern Territory rose 15.4%
  • in Queensland fell 1.7%, in South Australia fell 2.5% and in Tasmania fell 3.0%

In January 2022, in original terms:

  • the value of new variable rate loan commitments funded in the month fell 17.1%
  • the value of new fixed rate loan commitments funded in the month fell 34.2%

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

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

  • rose to another record high of $619k at the national level, a rise of $17k (2.8%) from the previous month
  • rose to all-time highs in all states except Tasmania and the Northern Territory

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

  • fell 6.9% at the national level and was 32.6% lower compared to a year ago

  • in Queensland fell 16.1%, in Western Australia fell 8.1%, in Victoria fell 2.2%, in New South Wales fell 2.0%, in South Australia fell 4.6%, in Tasmania fell 12.5%, and in the Northern Territory fell 1.6%

  • in the Australian Capital Territory rose 25.7%

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 9 336 31.9% 27.8%
 New South Wales 2 035 28.0% 24.3%
 Victoria 3 047 34.7% 30.8%
 Queensland 1 802 30.3% 25.9%
 South Australia 576 27.1% 22.9%
 Western Australia 1 409 38.4% 34.1%
 Tasmania 163 32.0% 25.2%
 Northern Territory 54 25.0% 23.0%
 Australian Capital Territory 250 32.3% 28.5%

NP: Not published due to the construction of dwellings and purchase of newly erected dwellings denominator not being available for publication. 

(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.