Home buying intentions up amid soaring house prices

author-avatar By
on March 16, 2021
Home buying intentions up amid soaring house prices

Australians continued to look to the booming property market, with home buying intentions up once again in February 2021.

That's according to Commonwealth Bank's (CBA) latest Household Spending Intentions (HSI) series, which shows intentions to buy a home are at its highest level since 2015. 


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender

Variable
More details
UNLIMITED REDRAWS
  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
UNLIMITED REDRAWS

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
More details
REFINANCE ONLY
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
REFINANCE ONLY

Variable Rate Home Loan – Refinance Only

  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
NO ONGOING FEES
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
NO ONGOING FEES

Yard PAYG Home Loan (Principal and Interest) LVR ≤ 80%

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of August 7, 2022. View disclaimer.

Based on CBA's analysis of Google searches and trends, as well as home loan applications, it expects the housing market to continue to be a key source of support for the economic rebound in 2021, thanks mainly to ultra-low interest rates. 

That's while house prices are rising by the highest margin in 17 years, which are now beginning to weigh on otherwise expanding consumer confidence

This is likely to continue, with CBA and also Westpac predicting house prices rises of 16% and 20% over the next two years respectively. 

Indeed, retail spending intentions softened in February 2021, despite recent rebounds in actual turnover figures

CBA saw strong increases in spending in a range of consumer goods, including clothing, groceries, furniture, digital apps, electronics, hobbies and toy stores, pets and more.

Weaknesses however were seen in dry cleaners and tailors, while travel spending intentions remained largely unchanged.

Weakness is still evident in spending on airlines, cruise ships, hotels & motels, timeshares, travel agents, car rentals and bus lines, although CBA expects the recent half-priced flights package (announced after these results were taken) to boost this spending. 

Overall results were mixed across the seven categories tracked, which also includes Motor Vehicles, Entertainment, Education, and Health and Fitness. 

“Fourth quarter data showed that economic growth improved further at the end of 2020, with a “V-shaped” recovery and we now expect that the Australian economy will grow by 4.4 per cent in 2021,” CBA Chief Economist Stephen Halmarick said. 

There were some interesting data points in this month's HSI release that occurred due to the changed landscape from COVID. 

Car buying intentions for example are lower than February 2020, despite a modest increase last month, as the trend of working from home reduces the need to commute. 

Entertainment spending meanwhile has increased substantially from 2020, not just on in-home entertainment like TV services, but in outdoor services as well like restaurants, movies and bowling alleys. 

See also: Vehicle purchases increase 31.8% in December 2020

CBAHIS

CBA HSI data for (top left to bottom right): Home buying, retail spending, motor vehicles, and travel.


Image by Agover from Pixabay 



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William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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