Home buying intentions down 13.9%: CBA

The Commonwealth Bank of Australia’s (CBA) latest Household Spending Intentions (HSI) Index for April revealed that home buying spending intentions dropped by 13.9 per cent in April month on month and fell 12.1 per cent year-on-year.

April being a shorter trading month due to the Easter holidays and Anzac day impacted both home loan applications and online searches for the month, according to the major bank.

With the Reserve Bank of Australia (RBA) lifting the cash rate for the 11th time to an 11-year high of 3.85 per cent in May 2023, the major bank stated it expects the “lagged effect of higher interest rates to see household spending weaken as the year progresses”.

The HSI index overall for April fell by 4.3 per cent in original terms, which was led by a drop in home buying, health and fitness, transport, and household services.

According to CBA, the index continued to moderate, edging down 3.7 per cent per year in April from 3.9 per cent per year in March following a peak of 15.2 per cent per year in August 2022.

ABS records rise in household spending in March

The latest Monthly Household Spending Indicator, March 2023 released by the Australian Bureau of Statistics (ABS) has revealed that household spending rose 8.2 per cent in March compared to the same month in 2022.

According to ABS, household spending increased in all spending categories throughout the year except for furnishings and household equipment and miscellaneous goods and services, which both fell by 1.7 per cent.

The largest increases were observed in the categories of hotels, cafes, and restaurants (22.8 per cent); transport (16 per cent); and food (12.6 per cent).

Notably, CBA’s HSI index for the month of March rose by 8 per cent in original terms following declines in both January and February.

ABS head of business indicators Robert Ewing stated household spending eased across all the categories throughout the year.

“Spending on discretionary goods and services rose 2.2 per cent, down from the recent peak in growth of 28.3 per cent in August 2022,” Mr Ewing said.

“Non-discretionary spending growth has also slowed, but to a lesser extent. In March, spending on non-discretionary goods and services increased 13.9 per cent, after peaking at 29.9 per cent in August.”

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