Australian borrowing surged in the December quarter, with mortgage demand climbing 12.3 per cent year-on-year to reach a four-year high. Unsecured credit also experienced growth, rising 5.9 per cent, primarily driven by a significant 15.5 per cent increase in credit card enquiries. These figures indicate a substantial uptick in consumer financial activity as the year concluded.
Gen Z consumers were a major factor in the growth of credit card usage, with a surge of 23.2 per cent in applications from this demographic. However, this increase was accompanied by a concerning rise in arrears within the same group, spiking by 28.8 per cent. This suggests that while younger Australians are increasingly accessing credit, some are struggling to manage their repayments effectively.
Across different states, Queensland recorded the strongest mortgage activity with a 17 per cent increase, followed by Western Australia at 15 per cent and New South Wales at 13.5 per cent. According to Equifax Australia chief solutions officer Kevin James, this increase may reflect the expanded First Home Buyer Deposit Scheme launched in October 2025, and buyers anticipating that interest rates had peaked. Equifax Australia is a data and analytics company that provides insights to help businesses and consumers make informed decisions.
“This is a significant increase in mortgage demand, and a level of activity we haven’t seen in nearly five years,” James noted. The data reflects a dynamic period in the Australian financial landscape, with both increased borrowing and potential challenges in managing debt among certain demographics.
