Equifax's Quarterly Consumer Credit Demand Index: July to September 2011

Equifax's quarterly Consumer Credit Demand Index, released today, shows demand for credit rose 2.4% year-on-year in the three months to September. Growth was led by a 4.4% year-on-year increase in personal loan applications - the first September quarter uplift since 2007.
Angus Luffman, Head of Consumer Risk at Veda, said: "Overall, the demand for new credit is trending upwards year-on-year since the huge falls of 2009.The result for September is also significant in seasonal terms. Historically, the trend is for consumer credit demand to fall in the September quarter following the end of financial year. This result shows the fall from the June quarter of -6.5% is the smallest on record since tracking began in 2004.
Credit card applications overall were flat year-on-year, posting a slight 0.5% increase in the latest September quarter. The return to positive territory is in contrast to the sharp year-on-year decrease during 2009, when demand was at its lowest, down -18.3%.
Among the states, Western Australia recorded the biggest year-on-year growth in credit card demand, up 14.9%. South Australia also showed growth, rising 6.5%. Queensland was the weakest performer, falling -4.2%; followed by New South Wales which was down -2.7%.
Personal loan enquiries rose 4.4% year-on-year. The positive result is the fourth quarterly year-on-year rise to be recorded, after 11 decreases dating back to the March 2008 quarter.
Western Australia again led growth in new credit, with demand for personal loans rising 10.3% year-on-year in the September quarter. The result was closely followed by the smaller market of the Northern Territory, up 9.2%. Among the larger states, New South Wales rose 3.8%, Victoria was up 4.4% and Queensland rose 3.9%.
"Western Australia had by far the strongest growth in year-on-year demand for new credit. The state also improved on its flat performance in the 2010 September quarter. The turnaround signals a marked improvement on the 2009 September period when it recorded double digit year-on-year falls in personal loans and credit card enquiries," Mr Luffman said.
Meanwhile, mortgage enquiries fell for the seventh consecutive quarter. Significantly however, the September quarter experienced the lowest rate of year-on-year decline since the 2010 March quarter.
Mortgage enquiries fell both year-on-year and quarter-on-quarter, down -6.7% and
-9.2% respectively. New South Wales saw the biggest improvement, almost flat against the previous year, down -0.2%. In contrast, there were double digital falls in Victoria, Tasmania and the ACT.