The latest official figures on personal credit show a steepening decline in that market, and one market participant is expecting that things will get worse.
The Reserve Bank reported last week that lenders’ personal credit balances fell by 0.7 per cent in September, compared with the previous month, and by 4.4 per cent over the 12 months to September.
The annual decline is the biggest since consumers were in the midst of the GFC in 2009 and has been progressively worse over the past year.
Credit reporting and data analytics company Equifax reported that consumer credit applications – a forward indicator – were down 9.8 per cent in the September quarter, compared with the September quarter last year.
Equifax said credit card applications were down 12.4 per cent in the September quarter and personal loan applications were down 7.8 per cent.
Equifax executive general manager, customer and solutions, Moses Samaha, said there was a changing preference from credit cards to buy now pay later payments among young people.
He said the fall in personal loan applications was largely due to lower demand for car loans. Car sales have weakened this year. Other than car loans, personal loan inquiries were steady.