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Lending indicators

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

Reference period
July 2021
Released
2/09/2021
Future Releases
  • Next Release 1/10/2021
    Lending indicators, August 2021
  • Next Release 1/11/2021
    Lending indicators, September 2021
  • Next Release 2/12/2021
    Lending indicators, October 2021
  • View all releases

Key statistics

In July 2021 in seasonally adjusted terms, the value of new loan commitments:

  • rose 0.2% for housing
  • rose 14.2% for personal fixed term loans
  • rose 56.0% for business construction (typically a volatile series)

New borrower-accepted loan commitments (seasonally adjusted)

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Jul-21 ($b)Month percent change (%)Year percent change (%)
Households   
 Housing32.120.268.2
  Owner occupier (a)22.77-0.458.3
  Investor (a)9.351.898.7
 Personal   
  Fixed term loans1.9814.226.4
Businesses   
 Construction2.9656.028.1
 Purchase of property7.555.5136.3

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

 

Important data quality note

Economic and Financial Statistics (EFS) collection

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 collected by APRA on behalf of the ABS and RBA. 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.

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. 

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.

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.

     

Housing finance

In July 2021 in seasonally adjusted terms, the value of new loan commitments:

  • for total housing rose 0.2%
  • for owner-occupier housing fell 0.4%
  • for investor housing rose 1.8%
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In July 2021 in seasonally adjusted terms, the value of external refinancing:

  • for total housing rose 6.0% to reach an all-time high of $17.2b
  • for owner-occupier housing rose 4.9%
  • for investor housing rose 8.3%
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Personal finance

In July 2021 in seasonally adjusted terms, the value of new loan commitments:

  • for total fixed term personal lending rose 14.2%
  • for personal investment rose 92.8%
  • for road vehicles rose 2.9%
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Business finance

In July 2021 in seasonally adjusted terms, the value of new loan commitments:

  • for construction rose 56.0%
  • for purchase of property rose 5.5%
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Housing finance (detailed)

New loan commitments by purpose (seasonally adjusted)

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Jul-2021Month percent changeYear percent change
Value($b)(%)(%)
 Owner occupier   
      Total housing (a)22.77-0.458.3
  Construction of dwellings2.47-4.745.1
  Purchase of newly erected dwellings1.56-6.138.5
  Purchase of existing dwellings17.320.868.4
      First home buyers5.84-7.636.1
 Investor   
      Total housing (a)9.351.898.7
Number(No.)(%)(%)
 Owner occupier   
      Total housing (a) (b)---
  Construction of dwellings 5,207-8.338.0
  Purchase of newly erected dwellings 2,839-8.624.4
  Purchase of existing dwellings29,322-1.438.9
      First home buyers12,930-6.820.4
 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 July 2021 in seasonally adjusted terms, the value of new loan commitments:

  • to owner-occupiers fell 0.4%, after a fall of 2.5% in the previous month. The level remains 58.3% higher compared to a year ago and is 63.6% higher than pre-COVID levels in February 2020.
  • to investors rose 1.8%, after a rise of 0.7% in the previous month. The level is the highest seen since the all-time high in April 2015.
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In July 2021 in seasonally adjusted terms for owner-occupier housing, the value of new loan commitments:

  • for the construction of new dwellings fell 4.7%, the fifth consecutive month of falls. The level has fallen by 41.9% from the all-time high seen in February 2021. Strength in this series which had built up during the availability of the HomeBuilder grant (introduced in June 2020) continued to unwind following the end of the grant in April 2021.
  • for the purchase of existing dwellings rose 0.8%
  • for the purchase of new dwellings fell 6.1%
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(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 July 2021 in seasonally adjusted terms for owner-occupier housing, the value of new loan commitments:

  • in New South Wales rose 6.6%. Lenders reported that a large proportion of these commitments were from loan applications made earlier in May and June.
  • in Victoria rose 0.4% and in the Northern Territory rose 13.2%
  • in Queensland fell 6.3%, in South Australia fell 8.2%, in the Australian Capital Territory fell 5.4%, in Tasmania fell 7.3% and in Western Australia fell 0.7%
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In July 2021 in seasonally adjusted terms for investor housing, the value of new loan commitments:

  • in New South Wales rose 6.1% and in Queensland rose 9.1%, both largely driven by lending for existing dwellings
  • in the Australian Capital Territory rose 6.0%, in the Northern Territory rose 27.2% and in Western Australia rose 0.5%
  • in Victoria fell 3.0%, in Tasmania fell 6.4% and in South Australia fell 1.0%
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In July 2021 in original terms:

  • the value of new variable rate loan commitments funded in the month fell 1.7%
  • the value of new variable rate loan commitments to first home buyers funded in the month fell 9.1%
  • the value of new fixed rate loan commitments funded in the month rose 0.8%
  • the value of new fixed rate loan commitments to first home buyers funded in the month fell 4.3%
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*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

First home buyers

In July 2021 in seasonally adjusted terms for owner-occupier first home buyers, the number of new loan commitments:

  • fell 6.8%, after a fall of 7.8% in the previous month. The level has fallen by 20.5% since January 2021 but remains 20.4% higher compared to a year ago. While the recent falls were still tied to the unwinding of strength in construction lending post-HomeBuilder, the fall in July appears more widespread.

  • fell across all states and territories

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

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 First home buyer loan commitmentsFirst home buyer ratioFirst home buyer ratio
 NumberDwellingsHousing
Total Australia13,11934.9%30.3%
 New South Wales 3,33331.8%27.6%
 Victoria 4,02737.8%32.6%
 Queensland 2,53332.6%28.4%
 South Australia 71629.0%25.0%
 Western Australia 1,84941.7%37.6%
 Tasmania 21635.1%27.6%
 Northern Territory 11336.9%34.2%
 Australian Capital Territory 33236.2%31.6%
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Series ID concordance mapping

Previous catalogue number

This release previously used catalogue number 5601.0.