Australian Consumer Credit: Forecasts and Future Opportunities

Summary

GlobalData’s “Australian Consumer Credit: Forecasts and Future Opportunities” report analyzes the Australian consumer credit market, with coverage of both supply and demand factors as well as sectoral analysis.

Consumer reservations about debt levels and repayment will relax as the economy continues to grow and unemployment falls. However, consumers will be cautious about taking on new debt, with consumer credit gross advances growing by a modest CAGR of 2.7% between 2017-20. Outstanding balances and gross advances have yet to reach pre-crisis levels. We now expect total fixed and revolving credit loans to reach A$156.6bn by 2020, with a CAGR of 2% over the forecast period. Australia’s mining states experienced a rough patch late in 2014, as the mining sector suffered due to the commodities bust. The end of the mining investment boom locally also led to a significant disparity in growth between Australian states. Although in its infancy, the new US administration has had a positive impact on major commodity prices, along with continued demand from East Asia. If sustained this will benefit Australia’s mining states and allow for continued expansion of the personal loan market.

Specifically, the report –

– analyzes the relative performance of the major sectors of the Australian consumer credit market

– reviews the drivers behind recent market performance

– identifies changes in the market dynamics and performance of Australia’s biggest banks

– analyzes the loan product preferences of Australian consumers

– forecasts balances outstanding

– forecasts future drivers of growth and product features

Scope

– Specialist loan providers (non-authorized deposit institutions) are rapidly increasing their market share at the expense of established authorized deposit-taking institutions (ADIs), rising from 11.3% in January 2010 to 23.2% in October 2016.

– Economic contraction in Australia’s primary mining and manufacturing states and relatively resilient economic activity across the Eastern Seaboard have caused New South Wales’ share of gross advances to rise by 6%, raising the risk of geographic concentration of debt.

– Strong growth figures from the P2P sector mask the fundamental problem of low consumer awareness, despite high levels of online research. The small digital marketing budgets of P2P lenders relative to established banks and specialist finance lenders will likely hamper their growth prospects.

Reasons to buy

– Which factors will impact the supply of lending?

– Which factors will affect consumer demand for credit?

– Which sectors offer the best prospects and opportunities for expansion over the next few years?