Veda Quarterly Consumer Credit Demand Index: Consumer credit demand mixed as appetite for personal loans increases (September 2016 Quarter)

  • Overall consumer credit applications up +2.6% (vs September quarter 2015)
    o   Credit card applications declined by -0.2% (vs September quarter 2015)
    o   Growth in personal loan applications rose +5.4% (vs September quarter 2015)
  • Mortgage applications increased +0.9% (vs September quarter 2015)

Sydney, Australia, Tuesday. 18 October 2016: The Veda Quarterly Consumer Credit Demand Index, measuring the volume of credit card and personal loan applications, rose at a rate of 2.6% in the September quarter, compared with the same period in 2015.

Growth in personal loan applications was a key driver of the eighth consecutive quarter of growth in the Index, which was released today by Veda, Australia and New Zealand’s leading provider of consumer and commercial data and insights and a wholly-owned subsidiary of Equifax.

Credit demand bounced back in the month of July, following the Federal election, but was softer throughout August and September. Although overall consumer credit applications rose this quarter, the annual rate of growth is still more subdued than it was earlier in the year.

Angus Luffman, Veda’s General Manager of Consumer Risk, said that the mixed results seen in the September Credit Demand Index, which measures demand for discretionary consumer credit, were a reflection of the varied economic conditions and the continued trend of consumers remaining circumspect about taking on additional credit.

“The Index, while still positive, has trended downward throughout 2016. This declining appetite for credit has been reflected in falls in the stock of other personal credit (excluding housing), as measured by the Reserve Bank of Australia, which was down by -1.2% for the year to August. This represents eight straight months of declining personal credit and the sharpest fall since June 2012,” Mr Luffman said.

The Veda Quarterly Consumer Credit Demand Index provides an early indication of movements in consumer spending and retail sales.

Personal loans rallied this quarter, driven by strong demand for automotive loans and the emergence of new entrants in the personal lending space.

“The auto lending market continued to perform very well, and was matched by continued growth in car sales” Mr Luffman said.    

“Interestingly, we have seen a significant impact on personal loan activity growth by new lenders, offering innovative solutions targeting niche market segments. These new market entrants usually offer their products via digital channels,” he added.

Credit card applications fell in the September quarter (-0.2%). By jurisdiction, TAS (+2.2%) and the NT (+2.2%) experienced the greatest growth in credit card applications, followed by VIC (+0.9%) and SA (+0.6%). NSW (-0.3%) and QLD (-0.6%) recorded the smallest declines in credit card applications, while WA (-2.0%) and the ACT (-3.4%) recorded the largest fall in credit card applications in the September quarter.

Growth in personal loan applications saw an increase in the September quarter (+5.4%). TAS was the lead performer, recording a growth rate of +8.8%. The NT (+7.7%), QLD (+6.7%) and NSW (+5.8%) all experienced growth in personal loan applications this quarter, followed by VIC (+4.4%), WA (+4.2%), the ACT (+3.9%), and SA (+2.4%).

Demand for mortgages rose +0.9% in the September quarter. This represents the first rise in mortgage applications following four consecutive quarters of decline. However, the rate of growth is still considerably lower than the most recent high of +13.6% in the June quarter of 2015.

The ACT (+7.5%) experienced the strongest rate of mortgage application growth, with TAS (+6.3%), VIC (+5.0%), SA (+4.1%) and QLD (+2.3%) also showing positive growth in the September quarter.

The most significant fall in mortgage applications was experienced in WA (-8.5%), followed closely by the NT (-8.2%). NSW (-1.0%) also experienced a decline in mortgage applications in the September quarter, suggesting high house prices in Sydney may be starting to bite.

Historically, movements in Veda mortgage applications have tended to lead movements in house prices by around six to nine months, with mortgage applications a good indicator of home buyer demand, and an excellent indicator of housing turnover. 

“Although we have seen a modest increase in mortgage applications this quarter, compared to the previous several quarters, growth is still subdued. While there has been a nationwide softening of mortgage demand over the course of 2016, we have seen movement between the states in terms of where demand is coming from. NSW, the NT and WA have moved into negative territory, while a pickup in activity has been recorded in the other states,” Mr Luffman said.

TABLE 1: Changes in Overall Consumer Credit Demand – Quarterly Year on Year % 

Quarterly Year on Year %








Credit Demand Index







  Credit Card







  Personal Loan







Mortgage Demand







Veda recomputes the entire index over its lifetime every quarter so there will be a slight adjustment to the above historical figures.



The Veda Quarterly Consumer Credit Demand Index measures the volume of credit card and personal loan applications that go through the Veda 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 Veda media releases: Veda Indices releases are intended as a contemporary contribution to data and commentary in relation to credit activity in the Australian economy. The information in this release is general in nature, is not intended to provide guidance or commentary as to Veda’s financial position and does not constitute legal, accounting or other financial advice. To the extent permitted by law, Veda provides no representations, undertakings or warranties concerning the accuracy, completeness or up-to-date nature of the information provided, and specifically excludes all liability or responsibility for any loss or damage arising out of reliance on information in this release including any consequential or indirect loss, loss of profit, loss of revenue or loss of business opportunity.