Lending indicators

Latest release

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

Reference period
October 2022
Released
2/12/2022
  • Next Release 13/01/2023
    Lending indicators, November 2022
  • Next Release 3/02/2023
    Lending indicators, December 2022
  • Next Release 3/03/2023
    Lending indicators, January 2023
  • View all releases

Key statistics

In October 2022, new loan commitments (seasonally adjusted):

  • fell 2.7% for housing
  • fell 0.5% for personal fixed term loans
  • rose 58.3% for business construction (a typically volatile series) and rose 0.1% in trend terms
  • fell 3.8% for business purchase of property (a typically volatile series) and fell 1.4% in trend terms

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

 Oct-2022 ($b)Month percent change (%)Year percent change (%)
Households
 Housing25.79-2.7-17.1
  Owner Occupier (a)17.16-2.9-17.2
  Investor (a)8.62-2.2-17.0
 Personal
  Fixed term loans2.29-0.511.7
Businesses
 Construction2.4058.315.8
 Purchase of Property5.74-3.8-22.4
  1. Loan commitments for owner occupier, investor housing and personal fixed term loans exclude refinancing.

Reverting to concurrent adjustment and reinstating trend data

Commencing with this issue, Lending Indicators has reverted to concurrent seasonal adjustment from the previous forward factors method and has also reinstated trend data. There have been no changes to the format of the publication data, e.g. download tables. For further information, see the notes titled "Seasonal adjustment methods" and "Suspension of trend series" below.

Important data quality notes

Seasonal adjustment methods

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 change to a forward factors approach to seasonal adjustment, the ABS annually undertakes an extensive review of its seasonally adjusted Lending Indicators series. Similar reviews are regularly undertaken across the ABS economic statistics program. The last review was conducted in early April 2022 and its results were implemented in the April 2022 Lending Indicators release, with new static forward factors for the 12 months from this date being calculated through the review process.

The review identified a range of time series treatments to ensure that the seasonal adjustment process continues to be less influenced by the large month-to-month movements over the past two years, and more informed by seasonality before the COVID period. Revisions to most seasonally adjusted series are therefore relatively minor but larger than would be observed through the use of concurrent seasonal adjustment (which was used prior to the COVID period, with revisions progressively made each month).

Further information can be found here:

Methods changes during the COVID-19 period

After monitoring the effects on lending patterns from COVID-19 and determining that there is no longer significant or prolonged disruption to key series, Lending Indicators has now reverted to the concurrent adjustment method commencing with this issue. This change has been applied to the entirety of the relevant series, including the COVID-19 period.

Furthermore, the Lending Indicators seasonal adjustment process has been updated to account for the effect of a public holiday in September. This has resulted in revisions to the September data and reduced some of the falls reported last month.

Suspension of trend series

The trend series attempts to measure underlying behaviour in lending activity. In the short term, this measurement was significantly affected by disruption to regular lending patterns that has occurred during the COVID-19 period, for example as potential home buyers faced uncertainty about their job security. If the trend estimates in this publication had been published without fully accounting for such irregular events, they would likely have provided a misleading view of underlying lending activity. Therefore, the Lending Indicators trend series were suspended starting from March 2020.

After monitoring the effects on lending patterns from COVID-19 and determining that there is sufficient certainty in the underlying trends in lending, Lending Indicators has now reinstated trend data commencing with this issue. This data has been reinstated for all the relevant series and through their entirety, including the COVID-19 period, except where it has been determined through a quality assessment that any series should remain suspended or partially suppressed.

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

  • for total housing fell 2.7% to $25.8b, after a revised fall of 4.4% in September. It was 17.1% lower compared to a year ago.
  • for owner-occupier housing fell 2.9% to $17.2b and was 17.2% lower compared to a year ago
  • for investor housing fell 2.2% to $8.6b and was 17.0% lower compared to a year ago
  1. All series exclude refinancing

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

  • for total housing fell 1.1% to $17.8b but was 9.7% higher compared to a year ago
  • for owner-occupier housing fell 1.3% to $12.2b but remained close to the all-time high of $12.5b seen two months ago
  • for investor housing fell 0.5% to $5.7b

Personal finance

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

  • for fixed term personal finance fell 0.5%, after a revised fall of 0.2% in September
  • for road vehicles fell 3.8%
  • for personal investment rose 8.3%

Business finance

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

  • for construction finance rose 58.3%, after a revised fall of 31.2% in September. In trend terms, it rose 0.1%.
  • for the purchase of property fell 3.8%, after a revised fall of 8.0% in September. In trend terms, it fell 1.4%.

These series can have volatile month-to-month movements in seasonally adjusted terms as they are strongly affected by small numbers of high value loans.

Housing finance (detailed)

Value of new loan commitments by purpose (seasonally adjusted)

 Oct-2022 ($b)Month percent change (%)Year percent change (%)
 Owner occupier
  Total housing (a)17.16-2.9-17.2
   Construction of dwellings2.10-3.0-3.0
   Purchase of newly erected dwellings1.022.0-16.2
   Purchase of existing dwellings12.77-3.8-19.9
  First home buyers4.15-1.6-21.6
 Investor
  Total housing (a)8.62-2.2-17.0
    

Number of new loan commitments by purpose (seasonally adjusted)

 Oct-2022 (No.)Month percent change (%)Year percent change (%)
 Owner occupier
  Total housing (a) (b)
   Construction of dwellings3 657-4.2-18.2
   Purchase of newly erected dwellings1 8266.5-20.0
   Purchase of existing dwellings21 416-4.9-21.6
  First home buyers8 576-3.2-25.6
 Investor
  Total housing (a) (b)   
  1. Housing includes loan commitments for dwellings, purchase of residential land and for alterations and additions.
  2. 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 October 2022 in seasonally adjusted terms, the value of new loan commitments:

  • to owner occupiers fell 2.9%, after a revised fall of 4.8% in September
  • to investors fell 2.2%, after a revised fall of 3.5% in September

  

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

  • for the purchase of existing dwellings fell 3.8% and was 19.9% lower compared to a year ago
  • for the construction of new dwellings fell 3.0% and was 3.0% lower compared to a year ago
  • for the purchase of new dwellings rose 2.0% but was 16.2% lower compared to a year ago
  1. 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.
  2. 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 October 2022 in seasonally adjusted terms for owner-occupier housing, the value of new loan commitments:

  • in New South Wales fell 3.4%, in Victoria fell 2.1%, in Queensland fell 3.3%, in the Australian Capital Territory fell 10.5%, in South Australia fell 3.2%, in Tasmania fell 5.6% and in the Northern Territory fell 3.0%

  • in Western Australia rose 1.5%

  

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

  • in Queensland fell 7.8%, in Victoria fell 1.1%, in South Australia fell 3.0%, in Western Australia fell 0.9%, in New South Wales fell 0.1% and in Tasmania fell 0.2%
  • in the Australian Capital Territory rose 2.6% and in the Northern Territory rose 1.6%

In October 2022, in original terms:

  • the value of new variable rate loan commitments funded in the month rose 0.02%
  • the value of new variable rate loan commitments to first home buyers funded in the month rose 2.3%
  • the value of new fixed rate loan commitments funded in the month fell 0.1%
  • the value of new fixed rate loan commitments to first home buyers funded in the month rose 3.5%
  1. 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.
  2. Total Fixed rate and Total Variable rate housing loans include first home buyer loans

In October 2022 in original terms, average loan sizes for owner-occupier dwellings (including construction, purchase of new dwellings and existing dwellings):

  • rose at the national level from $588k to $595k
  • rose across almost all states, most notably in Victoria from $600k to $622k
  1. 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 October 2022 in seasonally adjusted terms for owner-occupier first home buyers, the number of new loan commitments:

  • at the national level fell 3.2% to 8,576, after a revised fall of 4.0 in September. The October level was 47.0% below the January 2021 high of 16,187.
  • in Victoria fell 4.1%, in New South Wales fell 1.7%, in Queensland fell 1.3%, in Tasmania fell 14.6%, in South Australia fell 1.9%, in the Northern Territory fell 8.1% and in the Australian Capital Territory fell 2.3%
  • in Western Australia showed no change

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 Australia8 69532.2%27.4%
New South Wales1 92228.6%24.1%
Victoria2 69235.3%30.2%
Queensland1 84731.3%26.3%
South Australia46625.2%20.9%
Western Australia1 32537.5%33.4%
Tasmania12526.3%20.5%
Northern Territory7134.0%29.0%
Australian Capital Territory24736.8%32.7%
  1. Dwellings includes loan commitments for construction of dwellings, purchase of newly erected dwellings and purchase of existing dwellings.
  2. 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.

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