PHOTO: Westpac
- Australian home lending contracted by 4.8% in April, its largest monthly fall since 2015, after home inspections and auctions were temporarily prohibited.
- The drop was followed by car lending falling by 37.8% and personal loans by more than 17% as confidence sunk during the pandemic.
- However, a Westpac consumer survey released on Wednesday shows confidence is returning to pre-COVID-19 levels – suggesting Australians may believe the worst is over.
- The Commonwealth Bank has revised its forecasts, believing its forecast of 10% price falls may not come to pass after all.
Australia’s great love affair with the housing market appears to have cooled off somewhat, but the break may only have been temporary.
New home loans fell by 4.8% in April, marking the biggest monthly contraction since 2015, according to new ABS data.
While the fall was expected given the temporary prohibition on open houses and auctions, it underlines how much the market has so far encountered a temporary hiatus rather than a price meltdown.
“We had expected dwelling prices to fall around 7% over 2020 [or] 10% peak to trough [but] we now see the risks tilted towards a smaller fall,” CBA senior economist Kristina Clifton said in a note issued to Business Insider Australia.
“The coronavirus restrictions are being lifted faster than we first thought. Monetary and fiscal stimulus has been huge and is providing much-needed support to the economy.”
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