Home buying intentions hit a new high in March
Home buying intentions hit a new series high in March, reflecting an increase in home loan applications, new data has revealed.
With home buying intentions at a record high in March, CBA is predicting the home buying market to be a key source of support for the Australian economy in 2021, according to its latest Household Spending Intentions (HIS) report.
“As we stated in last month’s HSI report, residential property prices in Australia are expected to be up 8 per cent in 2021 and 6 per cent in 2022, with house prices expected to be 9 per cent higher this year,” CBA reiterated.
CBA’s CEO, Matt Comyn, fronted a Parliamentary hearing in Canberra last week, noting that despite strong property price growth, the CBA is not concerned.
“We are not overly concerned with what we are seeing at the moment in the context of broader financial stability,” he said.
The bank’s confidence is underpinned by the fact that the mix of buyers doesn’t resemble previous cycles, with owner-occupiers currently making up 75 per cent of applicants.
According to the big four bank, Aussies have drastically increased their spending habits post lockdown restrictions.
“The stronger Household Spending Intentions report is another signal that Australia’s economic recovery is ongoing,” said CBA chief economist Stephen Halmarick.
Travel spending intentions posted the strongest year-on-year improvement among all seven categories in CBA’s HIS series.
But while travel is becoming increasingly popular, this economic recovery is not hitting all sectors, with consumer retail spending intentions dropping in March.
While the retail sector had been a standout in March 2020, as actual spending and spending intentions surged during the early stages of the pandemic, retail spending and spending intentions growth had stabilised in recent months.
“Retail sales were the outperformer last year as everybody rushed to the shops to buy their canned goods and toilet paper, so the comparisons to last year underplay the strength of the sector and the continued economic rebound,” Mr Halmarick concluded.