New research from the Commonwealth Bank Household Spending Intentions report shows the monetary policy stimulus works. It also reports that in October, home buying intentions continued to rise and are now close to the record levels highs seen in 2017. This says the rates of CBA Home Buying HSI are correlated with a steady pick-up in home prices.
CBA chief economist Michael Blythe says: “Lending over the four months to September grew at an annualised pace of 52%. And that certainly looks fast enough to give some boost to housing credit outstanding”.
The RBA minutes, however, says that the recent improvement in housing market conditions has not yet translated into stronger new housing sales. “Despite the stronger-than-expected pick-up in established housing markets, there had been little evidence of a lift in the early stages of residential development activity, the recent strengthening in housing market conditions would support building activity in time. The lagged response to higher housing prices and a period of low building activity had raised the likelihood that property investment would be stronger in the medium term than currently expected,” it says.
“The good news is that the lagged response to higher housing prices and a period of low building activity “The lagged response to higher housing prices and a period of low building activity had raised the likelihood that dwelling investment would be stronger in the medium term than currently expected,“ says RBA.
Recent indicators pointed to ongoing support for non-residential construction activity over the following year or so. Non-residential building approvals had increased in recent months and the pipeline of work for both non-residential building and private infrastructure had remained at a high level.