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.
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.
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]
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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.