Face of Nation : The break appears to be over and Australia’s love affair with the housing market is back on, albeit tentatively.
Data from the AFG Mortgage Index shows signs of increased activity, while the Commonwealth Bank predicts demand for housing to remain strong over the medium term.
The Reserve Bank of Australia has cut interest rates two months in a row to a new record low of one per cent, leading the big banks to pass on some of the savings to borrowers.
Home loan broker Australian Finance Group released data showing the number of mortgages lodged had lifted in the final quarter of the 2018/19 financial year, after dipping in the first months of 2019.
“There are tentative signs of increased activity with both lodgement numbers and volumes up significantly for the quarter,” AFG chief executive David Bailey said on Tuesday.
“It will be important to see the impact of recent moves by the RBA but we remain cautiously optimistic.”
Comparison website Finder surveyed more than 3000 Australians and found 60 per cent of them believed July was a good time to buy.
Graham Cooke, insights manager at Finder, said Australians seem to be taking lower rates and lower prices as a positive sign.
“Consumer attitudes regarding whether it’s a good time to buy are fairly divided, although slightly more think 2019 has potential and that’s increasing each month,” he said.
But Mr Cooke echoed concerns from the Commonwealth Bank’s global markets research team about affordability in the major cities.
CBA’s housing affordability report released Thursday found strong demand for city homes will continue.
“There is genuine concern, however, that the price of housing, especially in the major cities, will drive people away from these cities and have a negative impact on the supply of essential labour,” the report said.
“The alternative would involve both economic and social consequences, as people need to travel extraordinary distances between the housing they can afford and where their labour is needed.”
The report also said Australia should explore more “build-to-rent” properties as long-term rentals in cities as a way of increasing housing availability.
There was also a warning for governments to increase infrastructure spending to connect affordable housing with job centres.
