The demand for consumer credit rose 10.3% during the second quarter this year on the heels of a “surge” in personal loan applications (18.4%), according to recent data by credit reporting agency Equifax.

But that data also revealed an annualised 0.9% drop in mortgage applications over the same period, marking a decrease for the second consecutive quarter. Notably, easing growth was observed in New South Wales and Victoria, “where housing markets have been the strongest”:

  • Australian Capital Territory: +4.9%
  • Queensland: -3.4%
  • Northern Territory: -17.7%
  • New South Wales: +2.4%
  • South Australia: -4.6%
  • Tasmania: +12.1%
  • Western Australia: -18.5%
  • Victoria: +2.9%

Equifax senior GM for consumer products Angus Luffman said the overall drop indicates the beginning of a downward trend across all states and territories. “Any debate about whether the housing market is softening should now be put to rest, as we can clearly see that, even in the historically strong geographies on the Eastern seaboard, mortgage application demand is slowing or already in decline.”

National Australia Bank (NAB) recently slashed its growth forecasts for both houses and units this year due to sharply deteriorating sentiment about the property market.

NAB reduced its forecast for house price growth this year to 5%, from 7.2%. The bank also halved its expectations for units to 3%, from 6.8% three months prior.

“Falling confidence reflects weaker expectations for both house prices and rents,” said Alan Oster, NAB’s group chief economist. “Property experts lowered their expectations in all states, except WA, with the biggest cutbacks in Victoria and to a lesser extent in Queensland and NSW.”

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