SYDNEY – 16 November 2020 –Consumer credit demand fell significantly in the September quarter, down -29.6% compared to last year according to data from the latest Quarterly Consumer Credit Demand Index (Sept 2020). The decline is being driven by a substantial drop in personal loans (-32.3%) and the continued downward spiral of credit cards (-39.5%). The Victorian COVID-19 lockdown has largely contributed to this decline with demand for credit cards, personal loans and auto finance in Victoria down more than 40%.  

Released today by Equifax, the global data, analytics and technology company and the leading provider of credit information and analysis in Australia and New Zealand, the index measures the volume of credit applications for credit cards, personal loans, Buy Now Pay Later (BNPL) and auto loans. The data has been re-indexed* from 2018 to account for the recent inclusion of Buy Now Pay Later applications.

Despite the overall decline in credit applications, mortgage demand remains strong, with home loan applications for the September 2020 quarter up +16.3% from a year ago. Even Victorian home buyers continued to apply for mortgages despite spending the three months to September confined by COVID-19 lockdown restrictions. 

All states and territories experienced an increase in mortgage applications in the September 2020 quarter compared to the previous year. Strong demand was seen in Western Australia (+48.3%) and the ACT (+31.6%), with a softer recovery in NSW (+14%) and Victoria (+1.3%). As Melbourne moves out of stage-four restrictions, home buyer activity is expected to further strengthen over the next quarter provided the virus remains contained, and interest rates remain low.
Mortgage demand includes loans for new properties as well as re-financing. Historically, movements in Equifax mortgage application demand data has led movements in house prices by around six to nine months. Mortgage applications are not part of the Consumer Credit Demand Index but are a good indicator of home buyer demand and housing turnover. 

Kevin James, General Manager Advisory and Solutions, Equifax said: “Coronavirus government stimulus measures like JobKeeper have helped cushion the blow of this pandemic for consumers who would otherwise rely on credit. This is particularly evident when looking at the volume of personal loan applications, which have dropped by around 30 per cent for two consecutive quarters. As government stimulus starts to pull back, we anticipate personal loans may experience a revival, particularly among sub-prime borrowers who may not be eligible for other kinds of financing.” 

Demand for Buy Now Pay Later applications have decreased for two consecutive quarters, down -13.2% in the September quarter compared to the previous year. For the first time in more than eight quarters, this drop in demand extended across every Australian state and territory.

“Despite the subdued interest in Buy Now Pay Later, there have been some interesting movements across generations. In the September quarter, baby boomers had the lowest share of enquiries for BNPL but the highest rate of growth. Generation Z accounted for a quarter of all enquiries even though they only made up 5% of the working adult population. And digital-savvy Gen Y has shown the largest shrink of any generation,” James said.

TABLE 1: Consumer Credit Demand by State

Mortgage demand by state


IMAGE 1: Equifax Consumer Credit Demand Index – September 2020 Quarter

Consumer Credit Demand

Mortgage Demand

GRAPH 1: Consumer Macro Credit Demand – Quarterly YOY

GRAPH 2: Consumer Credit Applications – Indexed by Type

Re-indexed data to commence in 2018 (previously 2015)
Added buy now pay later and auto loan credit enquiries as a separate trendline (previously rolled up into personal loans)


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The Quarterly Consumer Credit Demand Index by Equifax measures the volume of credit card, personal loan, applications, Buy Now Pay Later and auto loan applications that go through the Equifax Consumer Credit Bureau by financial services credit providers in Australia. Credit applications represent an intention by consumers to acquire credit and in turn spend; therefore, the index is a lead indicator. This differs to other market measures published by the RBA which measure credit provided by financial institutions (i.e. balances outstanding).

Purpose of Equifax media releases:
The information in this release does not constitute legal, accounting or other professional financial advice. The information may change, and Equifax does not guarantee its currency or accuracy. To the extent permitted by law, Equifax specifically excludes all liability or responsibility for any loss or damage arising out of reliance on information in this release and the data in this report, including any consequential or indirect loss, loss of profit, loss of revenue or loss of business opportunity. 

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