Aussies hunker down on debt in lockdown
New figures released from the ABS show new home lending plunged in the month of April by $935.5 million.
In the same month, Australians wiped a record $1.55 billion off debt accruing interest on their credit cards – the highest drop on record.
HOUSING
The ABS lending indicator statistics released today show that new lending dropped by 4.80 per cent, month-on-month, with the total value of new lending down by $935.5 million compared to March 2020, according to the seasonally adjusted data. Of this, a $720.9 million drop was from new owner-occupier loans.
Refinancing, however, picked up pace – the number of external refinances increased by 11.20 per cent in the month of April, and 26.96 per cent, year-on-year, according to the seasonally adjusted figures.
Value of new loans | % change | % change |
Mar 2020 – Apr 2020 | Apr 2019 – Apr 2020 | |
Total housing | -4.80% | 11.24% |
Owner occupiers | -5.00% | 14.75% |
Investors | -4.23% | 2.38% |
Notes: Seasonally adjusted figures. Figures exclude refinancing.
Source: ABS lending indicator statistics for April 2020, released 10 June 2020.
Number of owner-occupier loans | % change | % change |
Mar 2020 – Apr 2020 | Apr 2019 – Apr 2020 | |
First home buyers | -3.75% | 15.56% |
Refinancers | 11.20% | 26.96% |
Notes: Based on the number of new loans to owner occupiers using seasonally adjusted figures.
Source: ABS lending indicator statistics for April 2020, released 10 June 2020.
CREDIT CARDS
Statistics released yesterday from the RBA show that outstanding debt accruing interest dropped by $1.55 billion or 5.76 per cent. The highest monthly drop on record.
TOTAL | Apr-20 | Mar 2020 vs Apr 2020 | Apr 19 vs Apr 2020 |
Number of accounts | 13.50 million | -136,817 -1.00% | -1.09 million -7.48% |
Total balances accruing interest | $25.43 billion | -$1.55 billion -5.76% | -$4.10 billion -13.87% |
Total value of purchases | $14.72 billion | -$6.43 billion -30.42% | -$7.22 billion -32.92% |
Total value of cash advance | $307.44 million | -$199.54 million -39.36% | -$287.76 million -48.35% |
Notes: excludes commercial cards, using original data from the RBA. Data released 9 June 2020.
RateCity.com.au research director, Sally Tindall, said a lot of Australians spent their lockdown refinancing their mortgages and getting on top of their debt.
“Australians spent the month of April getting their finances in order, scaling back spending and knocking down their debt, with the biggest monthly drop in debt accruing interest on record,” she said.
“The early access to superannuation program is likely to be a factor in this record busting drop, giving some Australians an opportunity to wipe clean their credit cards that was, in their mind, too good to refuse.
“Refinance activity has also taken off during lockdown. We expect this to continue to gain pace with many homeowners looking to sure up their finances.
“In relation to mortgages, today’s drop is likely to be the beginning of a long road ahead for the home lending market.
“In April alone, nearly one billion dollars of new lending was ripped out of the property market, as the country went into lockdown; the biggest monthly drop in new lending since October 2015, in dollar terms,” she said.