Powered by MOMENTUM MEDIA
Mortgage business logo

Mortgage demand continues to fall, according to latest Equifax data

Home loan applications continue to decline, according to the latest Equifax data. 

Data company and credit information provider Equifax has released its Quarterly Consumer Credit Data Index (for the quarter ended June 2022), revealing that consumer demand for mortgages has continued to fall.

According to the data, mortgage demand continued to ease in the last quarter, falling 5.3 per cent when compared to the June 2021 quarter and dropping for the second consecutive quarter.

A decline in mortgage applications was noted in all states except Queensland and South Australia, with NSW accounting for the greatest drop in demand (11.1 per cent) on a year-on-year basis.

After NSW, mortgage demand in ACT was 8.5 per cent down, while Victoria was 6.6 per cent down and Tasmania 6.0 per cent down.

The NT and Western Australia only recorded small declines in home loan application numbers, down 2.2 per cent and 1.9 per cent, respectively.

The drop in mortgage applications comes off the back of an “inflated 2021 housing market”, which was assisted by historically low-interest rates and high savings buffers.

md discover

Speaking in May when releasing the March quarter data, Kevin James, general manager advisory and solutions at Equifax, had suggested that the “interest rate rises and uncertainty around what impact this will have on the housing market has started to have a tangible impact on consumer behaviour”, both for prospective new home buyers and existing mortgage holders.

BNPL and credit card apps on the up 

Although mortgage application activity fell in the June quarter, overall consumer credit demand increased.

Demand was up by 10.2 per cent in Q2 2022 when compared to the same period from last year, driven by growth in unsecured credit.

According to Equifax, demand for buy now, pay later (BNPL) has surged, increasing by 42.2 per cent in the June quarter, despite “turbulence in the sector”.

Credit card demand has also rebounded, increasing by 6.0 per cent year-on-year after recording three consecutive quarters of decline, while personal loan demand also grew (up 4.2 per cent compared to last year’s quarter), overtaking pre-COVID levels.

Auto loan applications declined by 15.1 per cent.

Mr James said that the recent increase in credit card demand “may have been influenced by the return of international travel, with many consumers using credit cards to earn points and for overseas spending”.

“As travel continues to increase, we may see further growth in credit card demand going forward,” he said.

However, Equifax also noted that there was an increase in arrears for personal loans, climbing to the “highest levels since the start of the pandemic”.

Mr James suggested that this “could be a sign of greater stress to come”.

“Activity in the personal loan market is often an indicator of future trends in other areas of consumer credit,” he explained.

“We’ve seen this play out in overseas markets. According to research from Equifax from the US, subprime consumer arrears in personal loans were among the first to be impacted by inflationary pressures.”

[RELATED: Mortgage demand sinks for 1st time since 2019]

You need to be a member to post comments. Become a member for free today!
Share this article
brokerpulse

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

brokerpulse graph

What are the main barriers to securing a mortgage at the moment?