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Lending indicators

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

Reference period
July 2020
Released
9/09/2020
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Key statistics

New loan commitments (seasonally adjusted):

  • rose 8.9% for housing.
  • rose 6.9% for personal fixed term loans.
  • fell 25.1% for business construction (typically volatile series).

Important data quality note

In this issue, there are significant revisions to previously published statistics about housing and personal loan commitments. Please see the section below titled "Data quality information: significant revisions to housing and personal finance, COVID-19 impacts, Economic and Financial Statistics (EFS) collection" for more information.

New loan commitments

 July 2020Month percent changeYear percent change
$b%%
  Seasonally adjusted 
Households   
 Housing
18.92
8.9
11.8
  Owner occupier (a)
14.33
10.7
18.5
  Investor (a)
4.58
3.5
-5.1
 Personal
 
 
 
  Fixed term loans
1.57
6.9
-3.9
Businesses
 
 
 
 Construction
2.32
-25.1
-16.6
 Purchase of property
3.10
-14.2
-25.4
a. Loan commitments for owner occupier, investor housing and personal fixed term loans exclude refinancing.
 

Key graphs

Total housing excluding refinancing rose sharply, but remains down on pre-COVID levels

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Personal fixed term loan commitments increased for the third straight month

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Business lending for the purchase of property reached the lowest level since August 2013 and is down 43% on the most recent May 2019 peak

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Data quality information: significant revisions to housing and personal finance, COVID-19 impacts, 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 - see below for further details.

Revisions

In previous releases, users have been advised that specific data quality issues have been identified with the reporting of detailed housing loan purpose categories and personal finance. This release includes updated information from reporting entities to correct these issues, with data revised back to July 2002. The most significant impact of these revisions is on the purchase of newly erected dwellings series in housing finance, for which some commitments have now been correctly reclassified to the purchase of existing dwellings as well as a portion to construction of new dwellings. Total housing is largely unchanged. The revisions have also corrected the over-reporting of new borrower accepted commitments for credit cards.

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 July 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.

The month of July 2020 showed the largest rise in the history of the series for new housing loan commitments, brought about by the easing of COVID-19 related restrictions on open houses, auctions and people's mobility in general. The increases were seen across most states and territories, including Victoria where restrictions were eased for a time before restrictions were re-introduced. New loan commitments for fixed term personal finance also rose in the month, though they remain below the pre-COVID-19 levels of February.

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.

Housing

New loan commitments by purpose Seasonally adjusted 
July 2020Month percent changeYear percent change
 %%
 Value ($b)  
Owner occupier   
 Total housing (a)
14.33
10.7
18.5
  Construction of dwellings
1.71
8.3
19.9
  Purchase of newly erected dwellings
1.13
9.8
30.9
  Purchase of existing dwellings
10.23
9.4
14.0
 First home buyers
4.24
10.6
26.5
Investor
 
 
 
 Total housing (a)
4.58
3.5
-5.1
 
Number
Owner occupier   
 Total housing (a) (b)
-
-
-
  Construction of dwellings
3 806
9.0
7.8
  Purchase of newly erected dwellings
2 261
4.0
21.4
  Purchase of existing dwellings
20 937
10.5
6.5
 First home buyers
10 451
14.4
24.3
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.
 

Both owner occupiers and investors displayed the second consecutive month of growth in July, following historically large falls in May

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There have been strong rises across owner occupier housing loan purposes in June and July, highlighted by a sharp increase in loan commitments for the purchase of residential land*

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*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.

July's rise in owner occupiers was seen across all states and territories, apart from ACT which remained relatively steady

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While NSW, WA and SA displayed rises for investors in July, Victoria fell.

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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 July 2020:

  • the number of owner occupier first home buyer loan commitments increased 14.4% 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 32.5% 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 commitmentsFirst home buyer ratioFirst home buyer ratio
Number (a)Dwellings (b)Housing (c)
Total Australia
11 018
38.9%
32.5%
 New South Wales
2 756
34.1%
29.3%
 Victoria
3 473
44.5%
36.2%
 Queensland
2 227
37.3%
31.4%
 South Australia
 594
28.2%
23.2%
 Western Australia
1 418
49.0%
41.1%
 Tasmania
 209
36.3%
26.6%
 Northern Territory
 104
51.2%
47.3%
 Australian Capital Territory
 237
35.1%
31.3%
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

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All states and territories displayed rises in new lending for owner occupier first home buyers

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*Investor first home buyers (number) for Tas and NT are not available for publication

Data downloads - time series spreadsheets

Data quality note

In previous releases, users have been advised that specific data quality issues have been identified with the reporting of detailed housing loan purpose categories. This release includes updated information from reporting entities to correct these issues, with data revised back to July 2002. There have been revisions to the purchase of newly erected dwellings series, for which some commitments have now been correctly reclassified to the purchase of existing dwellings as well as a portion to construction of new dwellings. Total housing is largely unchanged.

Data quality note applies to Table 3, Table 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

In previous releases, users have been advised that specific data quality issues have been identified with the reporting of personal finance. This release includes updated information from reporting entities to correct these issues, with data revised back to July 2002. There have been revisions to correct the over-reporting of new borrower accepted commitments for credit cards.

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

Previous catalogue number

This release previously used catalogue number 5601.0.