Powered by MOMENTUM MEDIA
subscribe to our newsletter

Home buying intentions on the rise: CBA

Consumers signalled stronger intentions towards home buying in May, as the big four bank has predicted house prices are set to increase by more than 10 per cent over the coming year.

The latest Commonwealth Bank Household Spending Intentions series report recorded a higher number of mortgage applications and home buying-related Google searches in the month of May, relative to May 2020 and 2019 – all while property prices continued to march higher.

CBA has forecast home prices will rise by 14 per cent over 2021 and 2022.

Belinda Allen, senior economist at CBA, commented that the high reading for home buying intentions is “no surprise given the strength in the housing market”.

“Home prices continue to lift, supported by low interest rates and the return of property investors to the market,” Ms Allen said.

Advertisement
Advertisement

But CBA’s findings have somewhat clashed with those of Westpac, which reported that housing-related consumer sentiment has plummeted by 27 per cent since November and has landed in pessimistic territory.

Westpac’s “time to buy a dwelling” index had declined for the fifth consecutive month.

Home sales had increased by 15 per cent in the month of May, the Housing Industry Association recently found, despite the end of the government’s HomeBuilder scheme. But the increase had followed a 54.4 per cent slump in new home sales in April.

Meanwhile, housing prices grew at the fastest quarterly rate in a decade over the three months to March, according to a recent report from the Real Estate Institute of Australia.

The weighted average capital city median price for house rose by 6.8 per cent over the quarter, while other dwellings were up by 2.7 per cent.

PROMOTED CONTENT


Across the eight capital cities, the median house price rose to $873,911, up from March 2020 by 11.1 per cent.

Similar to CBA’s analysis, 63 per cent of property professionals surveyed by the Australian Property Institute expect housing values across Sydney, Melbourne, Brisbane, Adelaide and Perth to continue rising over the next six months.

Meanwhile, the CBA report found a drop in retail spending intentions from the month before, but spending on health and fitness, education and motor vehicles increased.

“Compared to May 2020, we are seeing more spend on the type of routine, preventative healthcare such as dentist and orthodontist visits, medical laboratory testing and optometrists,” Ms Allen said.

“Many of these services were shut during the lockdown period and many people simply put this type of care on hold last year.”

Travel spending intentions, although higher than a year prior, unsurprisingly remained lower than May 2019.

[Related: Properties selling at record speeds: REA]

Find out more about the top property and home buying trends in your local area at the Better Business Summit 2021. Places are limited so make sure you secure your place at the five-state event asap!

Home buying intentions on the rise: CBA
Home buying intentions on the rise: CBA
mortgagebusiness

Are you a new-to-industry broker in the process of growing your business? Then there’s some great news: The Adviser’s New Broker Academy is back in 2021 and will provide you with essential insights into cutting-edge tools, strategies and processes to fast-track to success. Don’t miss your chance to attend. To secure your FREE place, visit newbroker.com.au now!

Sarah Simpkins

Sarah Simpkins is the news editor across Mortgage Business and The Adviser. 

Previously, she reported on banking, financial services and wealth for InvestorDaily and ifa.

You can contact her on This email address is being protected from spambots. You need JavaScript enabled to view it..

Latest News

Revolut has recruited from 86 400 and Citi for two senior additions to its local team, including a new head of lending. ...

The RBA has stated that APRA succeeded in curtailing a drop in home lending standards by implementing macro-prudential policies between 2014...

Analysis of cash rate changes has found property price growth is less dependent on low interest rates than commonly believed, according to a...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.