Experts have never felt better about housing affordability around the country, with signs that first home buyers may finally get a foothold into real estate.
In this month’s Finder RBA Cash Rate Survey, 40 experts and economists weighed in on future cash rate moves and other issues related to the state of the Australian economy.
While all experts and economists surveyed correctly predicted the cash rate to hold at 0.25 per cent (40/40), nearly two-thirds (62 per cent) responded with positive sentiment about housing affordability – a record percentage since Finder, the Australian comparison website, first started collecting data on the topic in March 2018.
Finder’s Economic Sentiment Tracker gauges experts’ confidence in five key indicators: housing affordability, employment, wage growth, cost of living and household debt.
Graham Cooke, Insights Manager at Finder, said housing affordability was a two-way street.
“When experts feel good about housing affordability there are two ways to look at it,” Mr Cooke said.
“On the one hand, prices are down so those who are ready to buy or who want to negotiate rent are in a good position to do so.
“On the other hand, those who own or are looking to sell, may see that their property isn’t worth what it once was.
“What is certain here is that the drop in prices, rock-bottom rates and increased competition for non-investment buyers combined with government stimulus will likely get a lot of the next generation onto the housing ladder for the first time.”
52 per cent of experts critical of early super decision
More than half of economists (52 per cent or 15/29) believe that Australians should not have been given access to their superannuation early.
But Mr Cooke said that he was surprised that number was not higher.
“From all that’s been made of the long-term costs associated with early super withdrawal, I’m surprised the number of economists against this move wasn’t higher,” he said.
Craig Emerson, of Emerson Economics, said: “Superannuation is for retirement incomes, not a means of savings for spending pre-retirement.”
Besa Deda, Chief Economist at St George Bank said: “Withdrawing super negates the compounding effect that benefits those who may have needed it most in retirement.
“Additionally, depending on specific investment decisions, withdrawing superannuation in the middle of the pandemic was likely to have resulted in the crystallisation of large losses.”
On the other side of the argument, Malcolm Wood, Chief Investment Officer of Baillieu, called it a “low cost, highly effective policy”.
Sveta Angelopoulos, Economics Lecturer at RMIT University, said people should have access to their funds when there is severe financial hardship.
“Super funds are ultimately the property of the Australians who hold them and individuals are in the best position to assess their own needs and requirements,” Dr Angelopoulos said.
Dr Andrew Wilson, Chief Economist of My Housing Market, predicts debate will soon emerge about the economic efficacy of the current superannuation system.
Leanne Pilkington, Managing Director of Laing and Simmons, said the economic fallout of the coronavirus that is reverberating around global markets has not impacted Australia as hard as many other nations.
“Even considering Victoria’s second wave and the potential for subsequent outbreaks elsewhere, employment figures are encouraging, and other key indicators point to our economy’s overall resilience,” Ms Pilkington said.
“Low, steady interest rates for the foreseeable future are appropriate to support the recovery.”