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Rebound now hit by Pandemic Second-Wave

For the first time in three years, consumer credit demand has moved out of negative territory. According to the latest Quarterly Consumer Credit Demand Index (June 2021), demand recovered sharply in the June quarter (+29.1%), with applications for credit cards, Buy Now Pay Later (BNPL), personal loans, auto loans and mortgages all experiencing double-digit growth. A drop in the momentum of recovery is expected in the third quarter, with stay-at-home pandemic orders impacting around 10 million Australians

Q2 2021 figures show double-digit growth in business credit demand, with solid gains across all categories of credit, according to the latest Equifax Quarterly Business Credit Demand Index (June 2021). Sustaining this pace of recovery into the third quarter is now under question as second-wave pandemic lockdowns show signs of dampening credit demand in NSW and Victoria.

Business credit demand has returned to the same level it was in the March 2020 pre-pandemic quarter, driven by a bounce-back in asset finance (+8.9%). Business insolvencies have yet to match their March 2020 level (down -36% compared to March last year) but are rising, month on month up by +78% in February and +29.0% in March, according to the latest Equifax Quarterly Business Credit Demand Index (March 2021).

Consumer credit demand continues to decline compared to last year, but the rate of decline is slowing compared to previous quarters. Despite credit cards and personal loan demand remaining soft, auto loans and Buy Now Pay Later (BNPL) applications continue to recover, according to data from the latest Equifax Quarterly Consumer Credit Demand Index (March 2021). Demand for mortgages grew throughout Australia up +23.5% compared to the March quarter 2020, with every state and territory experiencing growth. 

SYDNEY – 1 March 2021 – Equifax, a global data, analytics and technology company and leading provider of credit information in Australia, has finalised the purchase of Creditworks to help trade credit and SME businesses manage commercial risk through end-to-end credit automation.

Equifax Quarterly Business Credit Demand Index: Dec 2020

Overall business credit applications down -6.9% (vs Dec quarter 2019) Business loan applications decreased by -10.1% (vs Dec quarter 2019) Trade credit applications fell -8.4% (vs Dec quarter 2019) Asset finance applications increased by +0.2% (vs Dec quarter 2019).

Overall consumer credit applications down -21.9% (vs December quarter 2019)

Credit card applications reduced by -31.7% (vs December quarter 2019) Personal loan applications dropped -28.1% (vs December quarter 2019) Buy now pay later applications trending down -1.5% (vs December quarter 2019) Auto loan applications decreased by -2.8% (vs December quarter 2019)

Mortgage applications increased by +19.3% (vs December quarter 2019).

Queensland hardest hit in first wave lockdown with 9 of top 10 Mortgage Deferral hotspots.

Equifax Quarterly Consumer Credit Demand Index: June 2020

Overall consumer credit applications down -38.8% (vs June quarter 2019) Credit card applications dropped significantly by -45.4% (vs June quarter 2019) Personal loan applications dropped -33.5% (vs June quarter 2019) Buy now pay later applications reduced -7.3% (vs June quarter 2019) Auto loan applications down -13.7% (vs June quarter 2019) Mortgage applications increased by +7.6% (vs June quarter 2019).

Equifax Quarterly Business Credit Demand Index: June 2020

Overall business credit applications down -7.53% (vs June quarter 2019) Business loan applications decreased by -4.11% (vs June quarter 2019) Trade credit applications fell -17.82% (vs June quarter 2019) Asset finance applications declined -6.72% (vs June quarter 2019).