Personal loan uptake rises in Australia, study shows
Applications for personal loans in Australia picked up significantly in the third quarter of 2012.
According to the latest Consumer Credit Demand Index from Veda, overall personal loan uptake increased by seven per cent year on year during the July to September period.
Regionally, this growth was led by Western Australia and the Northern Territory, which saw loan applications rise by 12.4 per cent and 10.1 per cent respectively.
Demand also increased by 8.2 per cent in Victoria and 6.7 per cent in New South Wales as people sought out the best personal loans.
Despite the jump in demand for personal finance, applications for credit cards fell by ten per cent and Australians displayed a generally cautious attitude to credit and spending during the quarter.
In addition, mortgage enquiries were largely flat and have barely risen at all over the last 12 months.
Angus Luffman, general manager of Consumer Risk at Veda, explained: "The impact of the Federal Government's cash handouts has now faded, with consumer credit demand decreasing relatively quickly in the September quarter."
He added that "the short-term outlook for consumer spending and credit growth is modest".
This is because many Aussies are expected to remain cautious and pay down debts in the face of increased expenditure, ongoing concerns about wage growth and an uncertain employment market.
Although the Veda index found mortgage enquires to be generally flat, with just a 0.6 per increase detected during the quarter, a separate survey recently provided evidence that interest in real estate purchases is increasing.
According to the poll by mortgage broker Loan Market, 62 per cent of respondents said they have become more inclined to buy property since the Reserve Bank of Australia cut interest rates.
Roughly 40 per cent of respondents said their interest has risen slightly, while 20 per cent claimed they are ready to buy now.
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