The major talking point of 2023 from a consumer lending point of view has been the increase in interest rates over the year as a result of the RBA (Reserve Bank of Australia) attempting to address high inflation rates. Due to higher interest rates, outstanding balance has seen an increase for both consumer lending products and consumer credit.
Consumers may typically take advantage of low interest rate environments to invest in a property, and this was the case during 2021 when there was strong growth in gross lending for mortgages/housing. However, following cash rate spikes, gross lending witnessed a decline in 2022, and in 2023 it remains below 2021 levels.
Being one of the first and most successful markets for BNPL (Buy Now Pay Later) services, the category had seen strong growth in Australia for many years following its inception. However, this appears to be tapering off, with other personal lending - where BNPL services comprise a significant value share - experiencing slower growth in 2023.
The Australian Securities Investment Commission (ASIC) has declared its intent to increase its focus on protecting consumers from predatory lending strategies during these difficult economic times. When consumers are struggling financially, it can leave them vulnerable to some of the more predatory strategies used by lenders.
Mortgages/housing is predicted to record a steady increase over the forecast period. House prices had seen a decline in 2022; however, they have started picking back up in 2023 and this is likely to be the trend moving forward.
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Understand the latest market trends and future growth opportunities for the Consumer Lending industry in Australia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
Key trends are clearly and succinctly summarised alongside the most current research data available. Understand and assess competitive threats and plan corporate strategy with our qualitative analysis, insight and confident growth projections.
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Consumer Lending
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 DefinitionsThis report originates from Passport, our Consumer Lending research and analysis database.
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