As the threat of the pandemic continues to wane, Australian consumers are starting to regain their spending confidence. Gross lending has seen an increase across most lending categories, with the largest growth being posted by mortgages/housing.
The recent rise in inflation is placing an increasing amount of financial stress on Australians. Despite the local economy recovering post-pandemic, with consumers able to return to the workforce and businesses operating at full capacity, the price of necessities such as food, energy and petrol is forcing them to live well within their means.
Mortgages/housing gross lending witnessed strong growth throughout the pandemic and continues to grow in line with consistent demand for housing. With interest rates hitting historical lows over the last two years, this has been one of the best times for Australians to apply for a mortgage and invest in property, despite the constant rises in house prices in populated areas such as Sydney and Melbourne.
Buy Now, Pay Later (BNPL) continues to gain momentum despite the recent stock market turmoil faced by Zip and government regulation looming in 2023. Many Australians have come to rely on services such as Afterpay and Zip to help budget their purchases and finances, with some consumers using BNPL to make essential purchases such as groceries or white goods.
The forecast period is predicted to see a further increase in mortgages/housing gross lending, with demand for housing being persistent regardless of the economic conditions. Even with higher rates and house prices, there are programmes in place to assist first home buyers, the segment with the least purchasing power among homeowners.
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Aggregate of Consumer Credit and Mortgages/Housing. Gross Lending: The total value of loans advanced by institutions in a given year; data refers to single year only. Outstanding Balance: The collective amount owed by borrowers at the end of a given year; data refers to the cumulative impact of debt.See All of Our Definitions
This report originates from Passport, our Consumer Lending research and analysis database.
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