Cover Image
Market Research Report

Australian Consumer Credit: Forecasts and Future Opportunities

Published by GlobalData Product code 479848
Published Content info 36 Pages
Delivery time: 1-2 business days
Back to Top
Australian Consumer Credit: Forecasts and Future Opportunities
Published: March 16, 2017 Content info: 36 Pages

GlobalData's "Australian Consumer Credit: Forecasts and Future Opportunities" report analyzes the Australian consumer credit market, with coverage of both supply and demand factors as well as sectoral analysis.

Consumer reservations about debt levels and repayment will relax as the economy continues to grow and unemployment falls. However, consumers will be cautious about taking on new debt, with consumer credit gross advances growing by a modest CAGR of 2.7% between 2017-20. Outstanding balances and gross advances have yet to reach pre-crisis levels. We now expect total fixed and revolving credit loans to reach A$156.6bn by 2020, with a CAGR of 2% over the forecast period. Australia's mining states experienced a rough patch late in 2014, as the mining sector suffered due to the commodities bust. The end of the mining investment boom locally also led to a significant disparity in growth between Australian states. Although in its infancy, the new US administration has had a positive impact on major commodity prices, along with continued demand from East Asia. If sustained this will benefit Australia's mining states and allow for continued expansion of the personal loan market.

Specifically, the report -

  • analyzes the relative performance of the major sectors of the Australian consumer credit market
  • reviews the drivers behind recent market performance
  • identifies changes in the market dynamics and performance of Australia's biggest banks
  • analyzes the loan product preferences of Australian consumers
  • forecasts balances outstanding
  • forecasts future drivers of growth and product features


  • Specialist loan providers (non-authorized deposit institutions) are rapidly increasing their market share at the expense of established authorized deposit-taking institutions (ADIs), rising from 11.3% in January 2010 to 23.2% in October 2016.
  • Economic contraction in Australia's primary mining and manufacturing states and relatively resilient economic activity across the Eastern Seaboard have caused New South Wales' share of gross advances to rise by 6%, raising the risk of geographic concentration of debt.
  • Strong growth figures from the P2P sector mask the fundamental problem of low consumer awareness, despite high levels of online research. The small digital marketing budgets of P2P lenders relative to established banks and specialist finance lenders will likely hamper their growth prospects.

Reasons to buy

  • Which factors will impact the supply of lending?
  • Which factors will affect consumer demand for credit?
  • Which sectors offer the best prospects and opportunities for expansion over the next few years?
Table of Contents

Table of Contents

Table of Contents

  • 1.1. The Australian personal loan market is entering a period of slower growth 2
  • 1.2. Key findings 2
  • 1.3. Critical success factors 2
  • 2. OVERVIEW TO 2016 7
  • 2.1. Personal lending balances decreased in 2016 7
  • 2.1.1. 2016 gross advances started to grow again after two years of decline 7
  • 2.1.2. Balances outstanding marginally contracted in 2016 by 1.3% year-on-year 7
  • 2.1.3. Economic growth has continued, but capacity and willingness to take on more debt will be constrained 7
  • 2.1.4. Product preferences have seen little change in recent years 8
  • 2.1.5. Fixed-rate loans remain most attractive to Australian consumers 8
  • 2.1.6. Australian consumers are more price-sensitive on car loans 9
  • 2.2. Macroeconomic disparities across Australia's states have led to debt concentration increasing 11
  • 2.2.1. The rebound in the share of lending on the Eastern Seaboard has not come from dramatically higher volume 11
  • 3.1. Total fixed and revolving credit loans will reach A$156.6bn by 2020 12
  • 3.1.1. Market growth will resume but will only see modest gains 12
  • 3.1.2. 2017 will be the start of a slow turnaround for gross advances 12
  • 3.2. Demand for credit will slowly increase 13
  • 3.2.1. Macroeconomic conditions will help to maintain consumer demand at current levels 13
  • 3.2.2. Lenders need to be aware of the geographic concentration of their assets, as household debt-to-income reaches a new high 14
  • 3.2.3. Consumer confidence is recovering, albeit with some hesitancy, suggesting consumers may be unsure of their ability to take on new debt 15
  • 3.2.4. Retail sales are showing signs of growth, supporting uneven lending growth 16
  • 3.3. Traditional lenders risk further loss in market share as new competitors take advantage of shifts in consumer behavior 17
  • 3.3.1. Australian consumers are becoming more comfortable using non-ADIs for financing 18
  • 3.3.2. Providers need to maximize their cross-selling opportunities 18
  • 3.3.3. Consumers have become more comfortable with non-traditional lenders 18
  • 3.3.4. Internet research has become a standard research channel, with consumers comparing reputation and rates 21
  • 3.4. Lending across the subsectors of consumer credit will vary significantly 21
  • 3.4.1. The new and used car finance market will be the strongest-performing sector 21
  • 3.4.2. Gross advances for new and used cards will almost match credit cards and unsecured line of credit lending by 2020 23
  • 3.4.3. Increased credit card lending will require winning clients off rivals 24
  • 3.4.4. Demand for debt consolidation and refinancing products will rebound but then gradually decrease over the forecast period 25
  • 3.4.5. Demand for new and used car finance will outperform all other sectors 26
  • 3.4.6. The travel and healthcare lending categories will grow moderately in response to an improving economic outlook 27
  • 3.4.7. Credit for land and housing construction will enjoy strong growth 28
  • 3.4.8. Financing for household goods will experience strong growth over the forecast period 30
  • 5. APPENDIX 32
  • 5.1. Abbreviations and acronyms 32
  • 5.2. Definitions 33
  • 5.2.1. Gross advances 33
  • 5.2.2. Balances outstanding 33
  • 5.2.3. Line of credit 33
  • 5.3. Methodology 33
  • 5.4. Bibliography 33
  • 5.5. Further reading 34

List of Tables

List of Tables

  • Table 1: Gross advances per state (A$000m), 2010-16 11
  • Table 2: Gross advances (A$000m), January 2010-October 2016 19
  • Table 3: Australian personal lending balances outstanding (A$bn), 2015-20f 22
  • Table 4: Australian personal lending gross advances (A$bn), 2015-20f 24
  • Table 5: Gross advances and balances outstanding (A$bn), 2007-16 32

List of Figures

List of Figures

  • Figure 1: Australian consumers' historic restraint has caused balances outstanding to fall despite a recovery in new lending 8
  • Figure 2: Few Australians opt for the uncertainty of variable rate products 9
  • Figure 3: Partnering with car dealers will require fast approval and competitive rates 10
  • Figure 4: Total fixed and revolving credit lending will reach A$156.6bn by 2020 13
  • Figure 5: Future rate cuts unlikely, raising potential problems for debt servicing in Australia 15
  • Figure 6: Consumer confidence has been volatile, indicating a degree of hesitancy 16
  • Figure 7: All retail sectors experienced moderate-to-strong growth in 2015 17
  • Figure 8: Non-ADIs are starting to grow their market share quickly 19
  • Figure 9: Specialist finance companies in the 'Other' category are the fastest-growing among non-ADIs 20
  • Figure 10: Balances outstanding across seven consumer credit categories 22
  • Figure 11: Debt consolidation and refinancing will grow once again over the forecast period 23
  • Figure 12: Credit card balances outstanding are forecasted to reach A$58.1bn by 2020 25
  • Figure 13: Demand for debt consolidation refinancing will recover over the forecast period 26
  • Figure 14: Gross advances for new and used cars will match credit card lending by 2020 27
  • Figure 15: Balances outstanding for 'Travel and Other' lending are forecast to reach A$10.7bn by 2020 28
  • Figure 16: Land and housing construction balances outstanding will reach A$12.7.6bn by 2020 29
  • Figure 17: Spending on household goods will rise in line with the improved economic outlook 30
Back to Top