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Lending indicators

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

Reference period
May 2022
Released
4/07/2022

Key statistics

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

  • rose 1.7% for housing
  • rose 5.1% for personal fixed term loans
  • fell 3.5% for business construction (a typically volatile series)
  • rose 19.5% for business purchase of property (a typically volatile series)

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

  May-2022 ($b) Month percent change (%) Year percent change (%)
Households      
 Housing 32.37 1.7 -0.4
  Owner Occupier (a) 21.18 2.1 -9.7
  Investor (a) 11.18 0.9 23.7
 Personal      
  Fixed term loans 2.30 5.1 15.7
Businesses      
 Construction 2.13 -3.5 6.5
 Purchase of Property 7.24 19.5 51.4

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

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 continuing use of 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 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:

https://www.abs.gov.au/articles/methods-changes-during-covid-19-period

We will continue to monitor the effects on lending patterns from COVID-19 with a view to reverting to the concurrent adjustment method when there is no longer significant and prolonged disruption to key series. This could be as early as the second half of 2022.

April 2022 seasonal adjustment revision

As flagged in the data quality notes of the April 2022 publication, the Lending Indicators seasonal adjustment process has been updated to account for the effect of public holidays in April 2022 and similar previous April months. The closeness of Easter and ANZAC Day public holidays typically softens borrower demand and leads to increased leave-taking which can limit loan processing. This effect was more pronounced in years where Easter and ANZAC Day were one week apart, such as April 2022. Accounting for this effect in the seasonal adjustment process has reduced some of the falls reported last month, primarily in the headline owner-occupier housing data.

Suspension of trend series

The trend series attempts to measure underlying behaviour in lending activity. In the short term, this measurement has been significantly affected by disruption to regular patterns in lending that have occurred during the COVID period, for example as potential home buyers face uncertainty about their job security. If the trend estimates in this publication were to be published without fully accounting for such irregular events, they would likely provide a misleading view of underlying lending activity.

The Lending Indicators trend series were suspended starting from March 2020. We will continue to monitor the impacts on lending patterns from COVID-19 with a view to resuming publication of trend series when sufficient certainty emerges in the underlying trends in lending. This could be as early as the second half of 2022.

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

  • for total housing rose 1.7% to $32.4b, after a revised fall of of 2.8% in April
  • for owner-occupier housing rose 2.1% to $21.2b, after a revised fall of 1.7% in April 
  • for investor housing rose 0.9% to $11.2b, after a fall of 4.8% in April

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

  • for total housing rose 3.1% and was 16.6% higher compared to a year ago
  • for owner-occupier housing rose 2.0% and was 19.9% higher compared to a year ago
  • for investor housing rose 5.7% and was 10.2% higher compared to a year ago

Personal finance

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

  • for total fixed term personal finance rose 5.1%, after a fall of 3.7% in April
  • for personal investment rose 10.2%, after a fall of 20.6% in April
  • for the purchase of road vehicles rose 3.2%, after a fall of 6.7% in April

Business finance

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

  • for total construction finance fell 3.5%, after a fall of 8.5% in April
  • for the purchase of property rose 19.5%, after three consecutive months of falls

Housing finance (detailed)

New loan commitments by purpose (seasonally adjusted)

  May-2022 Month percent change Year percent change
Value ($b) (%) (%)
 Owner occupier      
  Total housing (a) 21.18 2.1 -9.7
   Construction of dwellings 2.36 12.3 -26.7
   Purchase of newly erected dwellings 1.19 2.3 -23.6
   Purchase of existing dwellings 16.17 0.3 -5.6
  First home buyers 4.98 3.4 -26.5
 Investor      
  Total housing (a) 11.18 0.9 23.7
       
Number (No.) (%) (%)
 Owner occupier      
  Total housing (a) (b)      
   Construction of dwellings 4 284 8.8 -37.2
   Purchase of newly erected dwellings 2 073 3.2 -28.4
   Purchase of existing dwellings 25 678 2.0 -12.7
  First home buyers 10 211 2.3 -31.6
 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 May 2022 in seasonally adjusted terms, the value of new loan commitments:

  • to owner-occupiers rose 2.1%, after a revised fall of 1.7% in April
  • to investors rose 0.9%, after a fall of 4.8% in April which broke 9 consecutive months of growth

  

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

  • for the purchase of existing dwellings rose 0.3% but was 5.6% lower compared to a year ago
  • for the purchase of new dwellings rose 2.3% but was 23.6% lower compared to a year ago
  • for the construction of new dwellings rose 12.3% but was 26.7% 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 May 2022 in seasonally adjusted terms for owner-occupier housing, the value of new loan commitments:

  • in Victoria rose 6.1%, in Queensland rose 2.5%, in South Australia rose 2.8%, in New South Wales rose 0.3%, in the Australian Capital territory rose 2.1% and in Tasmania rose 1.1%
  • in Western Australia fell 3.3% and in the Northern Territory fell 7.3%

  

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

  • in New South Wales rose 3.1%, in Victoria rose 2.8%, in Western Australia rose 3.9% and in Tasmania rose 23.6%
  • in Queensland fell 4.0%, in South Australia fell 7.1%, in the Australian Capital Territory fell 5.4% and in the Northern Territory (a smaller, typically more volatile series) fell 13.8%

In May 2022, in original terms:

  • the value of new variable rate loan commitments funded in the month rose 22.2%
  • the value of new variable rate loan commitments to first home buyers funded in the month rose 18.3%
  • the value of new fixed rate loan commitments funded in the month fell 16.1%
  • the value of new fixed rate loan commitments to first home buyers funded in the month fell 24.3%

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

  • rose 0.7% at the national level from $611k to $615k. Average loan sizes, have in general, continued to rise despite recent moderations in owner-occupier lending activity. This reflects a larger decline in the number of loan commitments relative to their value.
  • rose in Queensland, in Victoria and in the Australian Capital Territory
  • fell in all other states

*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 May 2022 in seasonally adjusted terms for owner-occupier first home buyers, the number of new loan commitments:

  • rose 2.3% at the national level but was 31.6% lower compared to a year ago

  • in Victoria rose 8.6%, in New South Wales rose 1.9%, in the Australian Capital Territory rose 12.8%, in the Northern Territory (a smaller, typically more volatile series) rose 36.2% and in Tasmania rose 10.0%

  • in Western Australia fell 2.4%, in Queensland fell 0.5% and in South Australia fell 1.5%

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 10 572 31.6% 26.6%
 New South Wales 2 326 27.5% 23.3%
 Victoria 3 547 35.5% 30.2%
 Queensland 1 943 29.1% 23.7%
 South Australia 587 24.9% 20.1%
 Western Australia 1 547 37.8% 33.3%
 Tasmania 181 28.3% 22.8%
 Northern Territory 74 31.8% 27.5%
 Australian Capital Territory 367 37.3% 33.1%

(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.