• Equifax's Quarterly Consumer Credit Demand Index: April to June 2011

Equifax's Quarterly Consumer Credit Demand Index: April to June 2011

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Equifax's quarterly Consumer Credit Demand Index (CDI), released today, shows consumer credit demand dropped 5.1% since March 2011 but increased 2.8% year-on-year in the April-June quarter.
Angus Luffman, Head of Consumer Risk at Veda said: "The April to June quarter closes out what has been a very soft financial year for credit demand. The data in the final quarter reveals some positive trends in certain types of consumer credit, but overall credit demand remains soft and is still behind on pre-GFC levels."
Credit cards continue to record weak growth, falling sharply from the previous March quarter to -8.9%. Year-on-year performance saw credit card demand post itssecond consecutive decrease of 1.2%. All states recorded quarter-on-quarter declines. South Australia recorded the sharpest decline, down 11.4% on the March 2011 quarter, followed by NSW, -10.5%, and VIC, -10.2%.
"The drop in credit card demand appears to be offset by a rise in consumer demand for debit cards. Other factors potentially contributing to the patchy growth in credit cards include: the impact of the new responsible lending laws on banks conversion rates; and the continuing ‘save not spend' focus of consumers."
Personal loans recorded their third straight quarterly increase year-on-year after 11 consecutive decreases dating back to the March quarter of 2008. Personal loans increased 6.9% since June 2010 but were down marginally by -1.1% on the previous quarter. Of the major states, WA posted the strongest year-on-year increase in personal loans, up 8.2%, followed by Queensland, 7.6%, NSW, 7.2% and VIC, 6.8%.
"We are now seeing a trend where those states that once recorded weak results, such as Queensland and SA, are now matching the strength of states such as NSW and WA. Over the life of the Credit Demand Index, personal loans have been a lead indicator in overall consumer credit demand. Signs of continued, renewed growth across all states will be a trend to watch in the near term", said Mr Luffman.
Mortgage enquiries declined 17.2% over the period of July 2010 through June 2011.Applications for mortgages decreased 10.8% in the June 2011 quarter compared to the same time last year, posting their 6th consecutive quarterly decrease. The current June quarter however, declined at the lowest rate out of the past six quarters, recording a 6.3% increase since March 2011.
All states recorded year-on-year decreases in mortgage demand. Of the major states, Queensland recorded the sharpest decline of -18.4%, followed by WA, -11.7% and VIC, -11.4%. NSW recorded the smallest decline amongst all states, down -5.0%. In contrast, quarterly performance results show all states except Tasmania recorded gains on the March 2011 quarter, with NSW leading at 7.7%.
"The contrast in the yearly and quarterly performance results suggests there is a leveling in mortgage demand, as year-on-year declines are beginning to slow and quarter-on-quarter results show signs of growth", said Mr Luffman.
CHANGES ON PRIOR CORRESPONDING PERIOD (YOY)

  • % YoY (Apr - Jun 2010) %QoQ (Jan - Mar 2011) % FY July 2010 - FY June 2011
  • Credit Demand 2.8% -5.1% 1.6%
  • Credit Cards -1.2% -8.9% 0.8%
  • Personal loans 6.9% -1.1% 2.4%
  • Mortgages -10.8% 6.3% -17.2%
  • Table1. Changes in Consumer credit demand year-on-year

CREDIT CARD DEMAND APRIL - JUNE QTR 2011

  • State % YoY (Apr - Jun 2010) %QoQ (Jan - Mar 2011)
  • Total -1.2% -8.9%
  • NSW -2.7% -10.5%
  • VIC -0.5% -10.2%
  • QLD -4.1% -6.1%
  • WA 8.6% -5.1%
  • SA -3.0% -11.4%
  • NT -1.2% -8.3%
  • ACT 10.3% -6.8%
  • TAS -3.5% -4.6%
  • Table 2. Changes in Credit Card demand year-on-year

PERSONAL LOAN DEMAND APRIL - JUNE QTR 2011

  • State % YoY (Apr - Jun 2010) %QoQ (Jan - Mar 2011)
  • Total 6.9% -1.1%
  • NSW 7.2% -3.2%
  • VIC 6.8% -1.4%
  • QLD 7.6% 0.8%
  • WA 8.2% 1.8%
  • SA 3.1% -3.0%
  • NT 5.1% -0.6%
  • ACT 7.0% 1.9%
  • TAS 1.7% -1.8%

Table 3. Changes in Personal Loan demand year-on-year
MORTGAGE DEMAND APRIL - JUNE QTR 2011

  • State % YoY (Apr - Jun 2010) %QoQ (Jan - Mar 2011)
  • Total -10.8% 6.3%
  • NSW -5.0% 7.7%
  • VIC -11.4 7.4%
  • QLD -18.4% 4.8%
  • WA -11.7% 6.0%
  • SA -9.6% 3.2%
  • NT -16.9% 1.5%
  • ACT -7.5% 6.7%
  • TAS -14.0% -2.3%

Table 4. Changes in mortgage enquiries demand year-on-year
Source: Veda Advantage analysis July 2011
 
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Media Information:
Sarah Jane Williams at Launch Group: 02 9492 1040 or 0409 362 675
About Equifax's Consumer Credit Demand Index:
Equifax's Consumer Credit Demand Index looked at more than 80 million consumer credit enquiries from October 2002 to June 2011, registered on Equifax's consumer database. Consumer Credit Demand measures application volumes for credit cards and personal loans over each quarter.
About Veda
Veda is Australasia's leading data intelligence and insights company and has been at the forefront of the information services industry for many decades. Veda is built on the largest, most comprehensive and current data source in Australia and New Zealand. We hold more fit-for-purpose credit data than any other organisation in Australia and New Zealand, including information on 16.5 million credit active people and 4.4 million companies and businesses. The breadth and depth of our data, and the knowledge it delivers help customers take a proactive and informed approach in making decisions.
Veda serves a diverse range of markets including large financial institutions, small to medium sized enterprises, and consumers. We provide services in areas of Consumer Credit Risk, Commercial Credit Risk, Credit Analytics, Data Solutions, Fraud and Electronic Verification, Insurance, Automotive, Customer Location Services and Commercial Information Brokerage.
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