While consumer credit demand has continued to decline year on year, mortgage enquiries have increased for the first time since June 2017, according to new data.
Equifax’s Quarterly Consumer Credit Demand Index revealed a +2.01% increase in mortgage demand for the September quarter – the first uptick after nine consecutive quarters of decline in mortgage applications.
Victoria (+4.5%), New South Wales (+3.5%) and the Australian Capital Territory (+0.7%) each experienced a positive rise year on year, while the other states and territories showed an improvement in their decreasing trends.
“The bounce-back in mortgage enquiries after such a long time out in the cold is attributed to growing buyer confidence in the housing market. With two cuts to the Reserve Bank cash rate in the September quarter and ready availability of housing stock, there’s an incentive for people to get back in the game,” said Moses Samaha, executive GM of customer and solutions.
“It’s positive news for mortgage applications across all states and territories, with NSW, ACT and Victoria leading the charge. The other states and territories remained in the negative, but with significant improvements on the previous quarter.”
According to Equifax, mortgage applications are a strong indicator of home buyer demand and housing turnover.
The Index also revealed that credit card applications declined by -12.41% year on year, while personal loan applications dropped -7.80% compared to the same time last year, furthering a downward trend that began last quarter. The only state or territory to prove an exception was Western Australia.
“The continued decline in applications for credit cards shows they are increasingly less favoured by consumers. Young Australians, in particular, are drawn to Buy Now Pay Later services,” said Samaha.
He also linked the credit card decline to changes in ASIC regulation and the rollout of government reforms, such as restrictions on marketing of credit cards.
