This is despite the well-documented 25-month continuous fall in new car sales, and is something CommBank puts down to the wealth effect.

The 'wealth effect' is a phenomenon where as house prices increase, more people feel confident to spend money on expensive items like new cars. 

The wild fluctuation in household spending intentions between sectors is the new normal, according to CommBank chief economist Stephen Halmarick.

“When we look at spending intentions last month, we can see both entertainment and travel spending intentions declined sharply as the economic shutdown took hold, with both categories witnessing the lowest readings since the series began,” he said.

“In contrast, retail, online learning and health and fitness spending intentions saw sharp rises as people prepared themselves for an extended shutdown of many parts of the economy."

Despite COVID-19 challenges, many car dealerships are still conducting business through virtual showrooms, and many experts are saying it's a 'perfect storm' for buying a new car.

The wealth effect could also take a dive, as CommBank economists are predicting a 'worst case scenario' of house price slumps in the capital cities up to a third.

In the market for a new car? The table below features car loans with some of the lowest fixed interest rates on the market.

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LenderCar LoanInterest Rate Comparison Rate* Monthly Repayment Interest Type Vehicle Type Maximum Vehicle Age Ongoing Fee Upfront Fee Total Repayment Early Repayment Instant Approval Online Application TagsFeaturesLinkComparePromoted ProductDisclosure
6.59% p.a.
7.72% p.a.
$588
Fixed
New
No Max
$8
$400
$35,295
  • Demo vehicles accepted up to 7,500km
  • 3-7 year loan terms available
  • Balloon option available for fixed rates
 Disclosure
6.28% p.a.
6.28% p.a.
$584
Fixed
New
No Max
$0
$0
$35,034
  • No vehicle age limit
  • No ongoing or early exit fees
  • 1-7 years loan terms. Pay monthly, fortnightly, or weekly
 Disclosure
6.52% p.a.
6.95% p.a.
$587
Fixed
New, Used
No Max
$0
$350
$35,236
  • A leading Australian Finance Broker with proven experience you can trust
  • We've assisted more than 150,000 customers access over $8 billion in finance!
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 Disclosure
5.76% p.a.
5.76% p.a.
$577
Fixed
New, Used
No Max
$0
$275
$34,599
5.99% p.a.
6.34% p.a.
$580
Fixed
New
No Max
$0
$250
$34,791
6.25% p.a.
6.52% p.a.
$583
Fixed
New
No Max
$0
$195
$35,009
6.49% p.a.
6.84% p.a.
$587
Fixed
New, Used
No Max
$0
$250
$35,211
6.29% p.a.
7.71% p.a.
$584
Fixed
New, Used
No Max
$15
$250
$35,042
5.67% p.a.
6.10% p.a.
$575
Fixed
New
No Max
$0
$0
$34,524
7.99% p.a.
8.99% p.a.
$608
Fixed
New, Used
No Max
$9
$265
$36,489
7.99% p.a.
8.27% p.a.
$608
Fixed
New
No Max
$0
$200
$36,489
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  • Available for purchasing new and demo vehicles
  • $5,000 to $150,000 loan amount
  • Redraw facility available up to $5000/day
  • Required: Good credit history, stable employment history. Aus citizenship or PR.

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Important Information and Comparison Rate Warning

All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here.

The comparison rates in this table are based on a loan of $30,000 and a term of 5 years unless indicated otherwise. The comparison rates for car loans and secured personal loans for the relevant amounts and terms are for secured loans unless indicated otherwise. The comparison rates for unsecured personal loans are applicable for unsecured loans only. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates are not calculated for revolving credit products.

Monthly repayment figures are estimates only, exclude fees and are based on the advertised rate for the term and for the loan amount entered. Actual repayments will depend on your individual circumstances and interest rate changes. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

carbuying

Motor vehicle spending intentions. Source: CommBank Household Spending Intentions Report

Home buying spending intentions also started to nosedive from April, after reaching record highs in March, despite RBA rate cuts which would ordinarily "be expected to support buying intentions". 

"Into May, however, we have seen a recovery in auction clearance rates that suggest some more home buying activity ahead," the report said.

"In addition, the ability to have more people at open houses and auctions will help. The sharp rise in unemployment and the hit to confidence will likely continue to drag on the housing sector."

CoreLogic reported for the week ending 10 May, the nationwide auction clearance rate was 59.9%, up from 47.5% in the previous week, and a recent low of just 30.2% four weeks ago as lockdowns took full effect. 

Last week's clearance rate was the highest result since the week ending 15 March, however the number of auctions held in the past week was 80% lower than that high.

homebuying

Home buying intentions. Source: CommBank Household Spending Intentions Report

Health and fitness spending intentions also up despite gym closures

You don't necessarily need to pump iron to get your health and fitness fix.

CommBank's report detailed the health and fitness household spending intentions segment was the only one to increase.

This is despite many amateur sports leagues halting games and training, and gyms closing.

"Health and fitness spending intentions are being supported by spending on nursing and personal care and, especially, bicycle shops and fitness equipment – implying that efforts to try and stay fit and healthy during the shutdown period are a positive," the report said.

Step one in the Australian Government's easing of lockdowns includes the reopening of outdoor gyms, playgrounds and skate parks with a limit of ten people.

hfintentions

Health and fitness spending intentions. Source: CommBank Household Spending Intentions Report