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Lending indicators

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

Reference period
June 2020
Released
5/08/2020

Key statistics

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

  • rose 6.2% for housing.
  • rose 5.2% for personal fixed term loans.
  • rose 57.3% for business construction (typically volatile series).

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 June 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 strong falls last month in housing loan commitments, reflecting the restrictions of late March and April on open houses, auctions and people's mobility in general. Some of these restrictions temporarily eased in May, though the extent and timing of reduced restrictions varied by state and territory. Consequentially, there has been a general rise in housing loan commitments this month, though in contrast to the other states, owner-occupier commitments in Victoria fell. Easing restrictions and the end of the financial year are likely reasons for the strong rise personal lending for road vehicles.

    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

           June 2020
          $b
          Month percent change
          %
          Year percent change
          %
            Seasonally adjusted 
          Households   
           Housing
          17.43
          6.2
          4.5
            Owner occupier (a)
          12.99
          5.5
          8.7
            Investor (a)
          4.44
          8.1
          -6.1
           Personal
           
           
           
            Fixed term loans
          1.51
          5.2
          -10.9
          Businesses
           
           
           
           Construction
          3.10
          57.3
          2.4
           Purchase of property
          3.61
          -15.3
          -51.4
          a. Loan commitments for owner occupier, investor housing and personal fixed term loans exclude refinancing.

           

          Key graphs

          Total housing excluding refinancing recovered slightly in June, following historically large falls in recent months

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          Personal fixed term loans for road vehicles increased significantly in June 2020, boosted by easing COVID-19 restrictions

          Download
          Download

          Construction for non-building structures and non-residential building drove a volatile rise in construction finance for businesses in June 2020

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          Housing

          New loan commitments by purpose Seasonally adjusted 
          June 2020Month percent change
          %
          Year percent change
          %
           
          Value ($b)
          Owner occupier   
           Total housing (a)
          12.99
          5.5
          8.7
            Construction of dwellings
          1.39
          -3.0
          10.8
            Purchase of newly erected dwellings
          1.64
          -0.9
          36.6
            Purchase of existing dwellings
          9.00
          7.5
          4.3
           First home buyers
          3.83
          3.3
          19.5
          Investor
           
           
           
           Total housing (a)
          4.44
          8.1
          -6.1
           
          Number
          Owner occupier   
           Total housing (a) (b)
          -
          -
          -
            Construction of dwellings
          3 020
          -3.9
          -5.1
            Purchase of newly erected dwellings
          3 467
          4.4
          21.6
            Purchase of existing dwellings
          18 618
          9.7
          -5.3
           First home buyers
          9 141
          6.2
          7.7
          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.

           

          New loan commitments for investors outpaced owner occupiers in June 2020, however both series bounced back following historically large falls in May

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          June's rise was driven by the purchase of existing dwellings, while lending for the construction and purchase of new dwellings both declined slightly

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          The majority of the rise in owner occupiers was seen in Queensland and New South Wales, while Victoria declined by contrast

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          New South Wales drove the rise in new commitments for investors housing, outpacing all other states and territories by some margin

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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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          First home buyers

          In June 2020:

          • the number of owner occupier first home buyer loan commitments increased 6.2% in seasonally adjusted terms
          • the number of first home buyer loan commitments for investment purposes accounted for 4.9% of all first home buyer commitments, in original terms
          • owner occupier first home buyer loan commitments accounted for 31.3% 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
          9 616
          36.7%
          31.3%
           New South Wales
          2 398
          32.9%
          28.2%
           Victoria
          3 023
          42.0%
          34.3%
           Queensland
          1 910
          33.6%
          29.3%
           South Australia
           611
          28.9%
          25.5%
           Western Australia
          1 183
          46.6%
          41.4%
           Tasmania
           190
          35.8%
          28.2%
           Northern Territory
           85
          49.1%
          44.7%
           Australian Capital Territory
           216
          31.2%
          28.5%
          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 commitments for owner occupier first home buyers rose in proportion to the overall rise in owner occupier commitments for dwellings

          Download

          All states and territories apart from Victoria and ACT showed rises in new lending for owner occupier first home buyers

          Download
          Download
          Download

          *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.
          Data quality note applies to Table 28.

          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