Commercial and consumer data intelligence specialist Veda has released its quarterly Consumer Credit Demand Index for the first quarter of 2012, showing a continued decline in consumer credit demand.

 

The report found that overall consumer credit demand has slipped 4.8 per cent year on year, with credit card applications down by 8 per cent.

 

While the index found that mortgage enquiries increased for the first time in eight quarters in Queensland, the NT and WA, they have dropped sharply in NSW.

 

"Turning points in mortgage enquiries usually occur one to three quarters ahead of turning points in house prices, an early warning sign which could indicate that after a continued decline, mortgage enquiries may have bottomed out.  Veda mortgage enquiries are closely related to the number of housing finance approvals so this is a trend to watch, particularly if you are hoping for a future pick-up in house prices," Group Strategy and Planning Manager at Veda Angus Luffman said.

 

"In terms of state by state mortgage activity we are seeing different trends play out with NSW mortgage enquiries being affected by the expiration of stamp duty and Queenslanders starting to bounce back after a challenging year.”

 

Credit Card applications declined sharply in SA (-12%), NSW (-11.3%) and Victoria (-8.8%) over the last year while the decline is less severe in Queensland (-1.6%) and WA (-4.2%).  In part, the weakness in credit card applications reflects the rise in the use of debit cards and the introduction of responsible lending laws in 2011, which has led to more steps being added to credit card application processes.