Credit demand has shown negligible growth over the past year, while mortgage application growth has now slowed for four consecutive quarters.
Veda reported that its credit demand index for the October-December period was 0.9 per cent higher than the same quarter the year before.
That came after credit card applications rose 8.3 per cent annually while personal loan applications fell 5.3 per cent.
Veda’s general manager of consumer risk, Angus Luffman, said overall credit demand has been relatively flat over the past five quarters, despite the continuing appetite for credit cards.
“We have now seen seven consecutive quarters of growth for credit card applications, the longest period of sustained growth since the index has been published,” he said.
“At the same time, we have seen five quarters of negative or negligible growth in personal loan applications. Demand for personal loans is strongly influenced by car sales. Over the 12 months to November 2014, car sales fell by 3.8 per cent.”
Meanwhile, annual mortgage growth – which is not part of Veda’s credit demand index – fell to 2.8 per cent, which marked the fourth consecutive quarterly decline.
Mr Luffman said mortgage application growth has slowed for four consecutive quarters, and is down sharply from the peak of demand witnessed 12 months ago.
Mortgage applications are a good lead indicator of future activity in home buyer demand and housing turnover, according to Veda.
“Historically, movements in Veda mortgage demand have tended to lead movements in house prices by around six to nine months,” the firm said.