Equifax reported a 6.1% year-on-year rise in unsecured credit demand in October, driven by personal loans (+7.4%) and a sharp lift in credit card applications (+14.4%).
Kevin James (pictured), chief solution officer at Equifax, said the latest data shows households are becoming more confident.
“The Equifax Monthly Consumer Pulse - October 2025 shows that consumer confidence has strengthened with households being less cautious and actively re-engaging with credit," James said. "The rise in unsecured credit demand, particularly the 14.4% surge in credit card applications, is a key indicator.”
He added that consumers are moving “beyond essential spending toward discretionary purchases – especially in the lead up to the sale and holiday seasons.”
At the same time, inflation in Australia continues to rise, with October CPI lifting to 3.8% annually and trimmed-mean inflation increasing to 3.3%, reinforcing expectations that RBA will keep rates on hold. This contrasts with the earlier part of 2025, when three rate cuts helped underpin stronger consumer confidence and credit demand.
Mortgage demand rose 13.3% year-on-year in October (trading days adjusted), supported by three cash rate cuts in 2025. Month-on-month demand increased 6.9%, while year-to-date applications (Jan–Oct) were 7.6% higher than the same period in 2024.
Refinance activity remained strong, with total refinance enquiries accounting for 33.94% of mortgage demand. Upgrade-related refinancing rose 6.3% month-on-month and 15.1% year-on-year.
James said recovery is visible but uneven.
“The housing market is responding to the softening rate environment, which we can see in the lift in mortgage demand year-on-year," the Equifax leader said. "However, this momentum isn’t uniform across the country. We’re seeing stronger activity in regions like QLD, ACT, and WA, where the combination of lower rates and comparative affordability is driving new buyers and refinancers into the market.”
However, rising housing inflation – up 5.9% annually – is adding pressure and reducing expectations for further near-term rate cuts.
More borrowers are choosing to renovate rather than move, reflected in rising upgrade-related refinancing with the same lender.
James highlighted two persistent structural pressures: “Consumers are decisively choosing to renovate rather than move amid low housing stock, and the 'bank of mum and dad' remains a constant, with parents refinancing to support the next generation of first-home buyers.”
These trends reflect broader affordability challenges and tight housing supply across Australia.
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