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Lending indicators

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

Reference period
August 2021
Released
1/10/2021
Future Releases
  • Next Release 1/11/2021
    Lending indicators, September 2021
  • Next Release 2/12/2021
    Lending indicators, October 2021
  • Next Release 14/01/2022
    Lending indicators, November 2021
  • View all releases

Key statistics

In August 2021 in seasonally adjusted terms, new loan commitments:

  • fell 4.3% for housing
  • fell 2.5% for personal fixed term loans
  • fell 26.4% for business construction (typically a volatile series)

New borrower-accepted loan commitments (seasonally adjusted)

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Aug-21 ($b)Month percent change (%)Year percent change (%)
Households   
 Housing30.76-4.347.4
  Owner occupier (a)21.26-6.633.5
  Investor (a)9.491.592.2
 Personal   
  Fixed term loans1.93-2.538.9
Businesses   
 Construction2.18-26.477.3
 Purchase of property6.79-10.097.7

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

 

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.

     

Housing finance

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

  • for total housing fell 4.3%, the largest fall since May 2020
  • for owner-occupier housing fell 6.6%, the largest fall since May 2020
  • for investor housing rose 1.5%
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In August 2021 in seasonally adjusted terms, the value of external refinancing:

  • for total housing rose 3.2%, to reach an all-time high of $17.8b
  • for owner-occupier housing fell 1.0 per cent
  • for investor housing rose 11.5 per cent
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Personal finance

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

  • for fixed term personal lending fell 2.5%
  • for road vehicles fell 6.4%
  • for personal investment rose 16.7%
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Business finance

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

  • for construction fell 26.4%
  • for purchase of property fell 10.0%
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Housing finance (detailed)

New loan commitments by purpose (seasonally adjusted)

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Aug-2021Month percent changeYear percent change
Value($b)(%)(%)
 Owner occupier   
      Total housing (a)21.26-6.633.5
  Construction of dwellings2.44-0.917.2
  Purchase of newly erected dwellings1.39-10.719.3
  Purchase of existing dwellings16.09-7.144.0
      First home buyers5.55-4.911.2
 Investor   
      Total housing (a)9.491.592.2
Number(No.)(%)(%)
 Owner occupier   
      Total housing (a) (b)---
  Construction of dwellings 4,951-4.94.7
  Purchase of newly erected dwellings 2,498-12.06.3
  Purchase of existing dwellings28,335-3.422.2
      First home buyers12,547-3.0-2.1
 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 August 2021 in seasonally adjusted terms, the value of new loan commitments:

  • to owner-occupiers fell 6.6%, after a fall of 0.4% in the previous month. The level remains 33.5% higher compared to a year ago and is 52.8% higher than pre-COVID levels in February 2020.
  • to investors rose 1.5%, after a rise of 1.8% in the previous month. 
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In August 2021 in seasonally adjusted terms for owner-occupier housing, the value of new loan commitments:

  • for the purchase of existing dwellings fell 7.1%, driving the overall fall
  • for the construction of new dwellings fell 0.9%, the sixth consecutive month of falls. The level has fallen by 42.5% 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 new dwellings fell 10.7%
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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 August 2021 in seasonally adjusted terms for owner-occupier housing, the value of new loan commitments:

  • in New South Wales fell 9.6%, in Victoria fell 4.9% and in the Australian Capital Territory fell 11.0%. COVID lockdown restrictions were in effect in these states in July-August.
  • in Western Australia fell 2.9%, in Tasmania fell 4.3% and in the Northern Territory fell 1.3%
  • in Queensland rose 2.0% and in South Australia rose 1.8%
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In August 2021 in seasonally adjusted terms for investor housing, the value of new loan commitments:

  • in Queensland rose 13.6%, largely driven by lending for the purchase of existing dwellings
  • in Victoria rose 1.9%, in Western Australia rose 7.2%, in the Northern Territory rose 41.8% ($13m) and in Tasmania rose 7.9%
  • in New South Wales fell 3.2%, in South Australia fell 1.4% and in the Australian Capital Territory fell 0.8%
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In August 2021 in original terms:

  • the value of new variable rate loan commitments funded in the month fell 2.1%
  • the value of new variable rate loan commitments to first home buyers funded in the month fell 8.6%
  • the value of new fixed rate loan commitments funded in the month fell 2.4%
  • the value of new fixed rate loan commitments to first home buyers funded in the month fell 2.1%
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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

In August 2021 in original terms, average loan sizes for owner-occupier dwellings (including construction, purchase of new dwellings and existing dwellings):

  • fell at the national level by 1.2%, after reaching a record high of $572k in July 2021
  • fell across most states and territories, except New South Wales where it rose to a new record high of $732k
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First home buyers

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

  • fell 3.0%, the seventh consecutive month of falls. It fell 2.1 per cent compared to August 2020, the first through-the-year decline seen in two years.

  • showed the largest falls in New South Wales (11.5%), Victoria (3.8%) and the Australian Capital Territory (12.7%). COVID lockdown restrictions were in effect in these states in July-August.

  • in South Australia fell 1.1%, in the Northern Territory fell 16.7% and in Tasmania fell 8.8%

  • in Queensland rose 1.3% and in Western Australia rose 3.7%

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

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 First home buyer loan commitmentsFirst home buyer ratioFirst home buyer ratio
 NumberDwellingsHousing
Total Australia12,59035.1%30.4%
 New South Wales 2,93431.4%27.4%
 Victoria 3,89438.6%33.3%
 Queensland 2,65332.9%28.7%
 South Australia 69928.9%23.8%
 Western Australia 1,83942.7%37.9%
 Tasmania 18832.9%25.7%
 Northern Territory 9232.7%30.0%
 Australian Capital Territory 29136.1%31.9%
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Series ID concordance mapping

Previous catalogue number

This release previously used catalogue number 5601.0.