Credit demand tanks, Super release shanks

Ian Rogers

Application volumes for consumer credit have fallen heavily this year, data from illion and AlphaBeta shows.

The number of credit applications has fallen sharply since the first week of March, though volumes “stabilised over the last few weeks and are now down around 30 per cent in most states,” illion said.

The data covers applications for credit including mortgages, credit cards, mobile phone contracts, personal loans and other credit observed by illion. The sample accounts for around two-thirds of all credit applications in Australia.

Also captured by illion was insight on the spending and saving choices among the 1.63 million people that have dipped into their superannuation savings under the early release scheme. APRA yesterday said that A$12.2 billion has been paid out so far with an average payment of $7476.

Forty per cent of those who accessed their superannuation “actually saw no drop in their income during the COVID crisis,” illion found.

“People have also spent up big on their Super money: spending nearly tripled in the fortnight after the money was received, compared to an average fortnight before this money was accessed.

“A third of this money was used up in the first two weeks.”

Fourteen percent was used to repay personal debts, including credit cards, Buy now pay later debts and other bills, while eleven percent was spent on gambling (more than likely lottery tickets).

Total spending per person “is now four per cent below normal levels,” illion found.