Australians are putting their property buying plans on hold as the year comes to a close, according to newly released data.
CommBank’s October Housing Spending Intentions index revealed home buying spending intentions fell 1.4 per cent throughout the month.
While home loan applications remained slightly higher compared with the previous month, the positive momentum was partially offset by a decline in Google searches for property inspections and appraisals.
Commonwealth Bank’s Chief Economist, Stephen Halmarick, said the data was largely unsurprising given many parts of the country had recently emerged from an extended lockdown period.
“Over the last 12 months home buying spending intentions have climbed 12.4 per cent,” Mr Halmarick said.
“This spike in home buying intentions was likely driven by the historically low rate environment as well as the extended lockdown periods associated with COVID-19.”
Thanks to the pandemic, Australians had spent more time at home than usual, Mr Halmarick said.
“More time at home has ultimately urged some Australians to look at their living arrangements and consider buying another property elsewhere,” he said.
“In October however, many states lifted the various lockdown restrictions and Australians were once again able to dine out and catch up with people outside of their immediate household.
“Social plans and spending on entertainment and retail ultimately took precedence over property buying, with many Australians seemingly putting their home buying plans on the back-burner for the month.”
Mr Halmarick said it was common for home buying plans to be put on hold towards the end of the year, with Christmas and New Year festivities just around the corner.
“From the data we can see that while home loan applications remained strong, Google searches declined,” he said.
“This is to be expected at this time of the year, as Google searches usually take place at the beginning of a person’s home buying journey, while a home loan application usually represents the tail end of the journey – when they have found the property they wish to buy and now just need the finance to finalise the purchase process.”
Recent changes by the Australian Prudential Regulation Authority (APRA) to increase the serviceability interest rate buffer would ultimately have little impact on the future pace of home lending and spending intentions, Mr Halmarick added.
“While APRA has recently sought to slow the pace of home lending by raising the serviceability interest rate buffer by 50 basis points to three per cent, we doubt this will have a significant impact on the pace of home lending, as the overwhelming majority of home loan approvals are not at the borrowers’ maximum capacity,” he said.