- Overall consumer credit demand eased to -3.0% (vs June quarter 2013)
- Credit card applications up by only 1.6% on June quarter 2013
- Personal loan applications fall -7.1% on June quarter 2013
- Growth in mortgage enquiries solid, but eases to 6.1% (vs June quarter 2013)
The Veda Quarterly Consumer Credit Demand Index, which measures the volume of credit card and personal loan applications that go through the Veda Consumer Credit Bureau, eased to an annual rate of -3.0% in the June quarter.
The downturn in the June quarter was driven by a sharp fall in personal loan applications as well as a moderation in growth of credit card applications. The significant slowdown in consumer credit demand follows a two year growth cycle which saw the strongest consumer credit demand since June 2008 recorded during the March 2014 quarter.
Released today, the Veda Quarterly Consumer Credit Demand Index provides an early indication of movements in consumer spending and retail sales. Angus Luffman, Veda’s General Manager of Consumer Risk, said the softening of consumer credit demand in the June quarter was a result of a number of headwinds that have hit Australian consumers in recent months.
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).