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Lending indicators

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

Reference period
March 2022
Released
4/05/2022
  • Next Release 3/06/2022
    Lending indicators, April 2022
  • Next Release 4/07/2022
    Lending indicators, May 2022
  • Next Release 2/08/2022
    Lending indicators, June 2022
  • View all releases

Key statistics

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

  • rose 1.6% for housing
  • fell 0.4% for personal fixed term loans
  • rose 23.6% for business construction (a typically volatile series)
  • fell 16.8% for business purchase of property (a typically volatile series)

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

  Mar-2022 ($b) Month percent change (%) Year percent change (%)
Households      
 Housing 33.28 1.6 11.1
  Owner Occupier (a) 21.57 0.9 -2.2
  Investor (a) 11.71 2.9 48.4
 Personal      
  Fixed term loans 2.29 -0.4 27.4
Businesses      
 Construction 2.84 23.6 7.1
 Purchase of Property 6.29 -16.8 22.4

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

Important data quality note

Housing finance revisions this month

Recently introduced reporting changes have resulted in revisions to most Housing finance series.

A reporting threshold determines the inclusion of lending institutions in the data APRA collects on behalf of the ABS and RBA. To improve the quality of these statistics, the threshold for reporting housing finance data was recently reduced, resulting in a number of new entities reporting data for the first time. This has improved coverage of non-ADI lenders and smaller-ADIs whose lending may be significant at a state level, but less-so across Australia. This new data replaces an under-coverage correction that was previously estimated in anticipation of these reporting changes. 


Separately, reporting improvements made by some lenders resulted in changes to the classification of owner-occupier versus investor loan commitments within Housing finance. The reporting now better aligns with the definition of housing loan purpose which states that an owner-occupier loan is where funds are used for a residential property that is occupied or to be occupied by the borrower(s) as their principal place of residence.


Revisions from these two reporting changes have been implemented in the March 2022 release of Lending Indicators. These revisions generally appear as small level changes and extend back to September 2021. Levels of owner-occupier commitments have decreased slightly while those of investor commitments have increased slightly. The revisions have not significantly changed previously published Australia-level series movements or general patterns of loan commitment activity. Revisions are more noticeable in lower-level loan purpose and state aggregates.

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 is underway 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.

     

Housing finance

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

  • for total housing rose 1.6% to $33.3b following a fall of 3.5% in February after reaching a record high of $33.9b in January
  • for owner-occupier housing rose 0.9% to $21.6b and was 2.2% lower compared to a year ago. 
  • for investor housing rose 2.9% to a record high of $11.7b.

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

  • for total housing rose 4.6% and was 28.2% higher compared to a year ago
  • for owner-occupier housing rose 4.0%, slowing down from an 11.5% increase last month
  • for investor housing rose 5.7% and was 25.0% higher compared to a year ago

Personal finance

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

  • for fixed term personal finance fell 0.4%
  • for the purchase of road vehicles fell 2.2%
  • for personal investment fell 3.3%

Business finance

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

  • for total construction finance rose 23.6% after a fall of 40.2% in the previous month.
  • for the purchase of property continued to fall 16.8% after a fall of 3.0% in the previous month. 

Housing finance (detailed)

New loan commitments by purpose (seasonally adjusted)

  Mar-2022 Month percent change Year percent change
Value ($b) (%) (%)
 Owner occupier      
  Total housing (a) 21.57 0.9 -2.2
   Construction of dwellings 2.22 -0.5 -38.6
   Purchase of newly erected dwellings 1.26 5.4 -20.1
   Purchase of existing dwellings 16.58 0.5 9.0
  First home buyers 5.10 5.9 -25.2
 Investor      
  Total housing (a) 11.71 2.9 48.4
       
Number (No.) (%) (%)
 Owner occupier      
  Total housing (a) (b)      
   Construction of dwellings 4 139 -4.7 -49.6
   Purchase of newly erected dwellings 2 301 8.3 -26.8
   Purchase of existing dwellings 26 060 -0.2 -6.7
  First home buyers 10 394 4.2 -32.8
 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 March 2022 in seasonally adjusted terms, the value of new loan commitments:

  • to owner-occupiers rose 0.9%, recovering from a 4.7% fall last month.
  • to investors rose 2.9% to a record high of $11.7b.

  

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

  • for the purchase of existing dwellings rose 0.5%, and was 9.0% higher compared to a year ago.
  • for the purchase of new dwellings rose 5.4%, but was 20.1% lower compared to a year ago
  • for the construction of new dwellings fell 0.5%, and was 38.6% 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 March 2022 in seasonally adjusted terms for owner-occupier housing, the value of new loan commitments:

  • in New South Wales rose 1.3%, in the Australian Capital Territory rose 18.1%, in Queensland rose 1.9%, in Victoria rose 1.0%, in South Australia rose 3.6%, in Western Australia rose 1.4%, in Tasmania rose 2.8%, and in the Northern Territory rose 4.9%.

  

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

  • in Queensland rose 6.7%, in New South Wales rose 1.6%, in South Australia rose 8.5%, in Western Australia rose 5.9%, in the Australian Capital Territory rose 14.9%, in Victoria rose 0.7%, in the Northern Territory rose 32.4% (a smaller, typically volatile series), and in Tasmania rose 2.3%.

In March 2022, in original terms:

  • the value of new variable rate loan commitments funded in the month rose 27.9%
  • the value of new fixed rate loan commitments funded in the month fell 9.8%

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

  • rose 1.2% at the national level from $593k to $600k.
  • rose in New South Wales, in Victoria, in South Australia and in Tasmania.
  • fell in Queensland, 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 March 2022 in seasonally adjusted terms for owner-occupier first home buyers, the number of new loan commitments:

  • rose 4.2% at the national level, and across all states and territories except Tasmania.

  • in New South Wales rose 12.5%, in Queensland rose 5.9%, in Western Australia rose 6.5%, in the Australian Capital Territory rose 44.2%, in Victoria rose 1.1%, in the Northern Territory rose 19.6%, and in South Australia rose 0.5%. 

  • in Tasmania fell 3.2%.

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 10 996 31.7% 26.7%
 New South Wales 2 488 28.0% 23.2%
 Victoria 3 371 34.9% 29.7%
 Queensland 2 180 29.4% 24.4%
 South Australia 605 25.7% 21.1%
 Western Australia 1 840 38.9% 34.4%
 Tasmania 165 27.9% 21.9%
 Northern Territory 60 24.7% 22.1%
 Australian Capital Territory 287 33.3% 29.3%

(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.

Post-release changes

4 May 2022: Trend series removed from the data downloads, published in error.