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Australia's desires to purchase a home continued to intensify in April, with spending intention levels hitting both monthly and annual gains, according to the latest report from Commonwealth Bank.
The study showed increases in both home loan applications and Google searches about property from prospective buyers.
The strong demand for homes is likely to push residential house prices to grow by 14% until the end of 2022.
"We expect the residential property market to be a key source of support for Australia’s economy in 2021, driven largely by the very low level of interest rates," said Stephen Halmarick, chief economist at CBA.
“HomeBuilder and lower interest rates have facilitated in a surge in demand for detached homes that ensures a record number of new detached homes will be built this year and into 2022. A cooling in sales is to be expected as the grants available through the HomeBuilder program came to an end,” said Angela Lillicrap, economist at the HIA.
The Commonwealth Bank study also showed increases in spending intentions across all segments. Retail, for instance, made a sharp recovery from the declines recorded in the previous month.
"Relative to 2019, retail spending remained solid across a number of categories, including clothing, footwear, groceries & supermarkets, department stores, household furnishing and equipment stores, stationary & office supplies, digital apps and pet shops."
Travel spending intentions also skyrocketed during the month. Spending intentions in the segment, however, continues to be lower compared to 2019, indicating the lasting impact of the COVID-19.
"While almost all travel spending categories were up in April on a year ago, relative to 2019, solid increases were only seen in visits to aquariums, camper and RV dealers, motor home, and RV rentals, and trailer parks, and camp grounds," Halmarick said.
Spending intentions also grew for health and fitness, entertainment, education, and motor vehicle. Halmarick said these gains spell good news for the overall economy.
"A year later, the economy has recovered strongly from COVID-19 impacts, with employment above pre-pandemic levels and household spending intentions on the rise as consumers once again feel confident about their economic prospects," he said.
