on several industries across economy, including Australia’s housing market which appears to be cooling in response to the sharp decline in demand for home loans and applications to build homes. According to recent data issued by the Australian Bureau of Statistics data, in the month of June, the value of new home loans fell by 1.6 per cent to $32.1 billion, while in the case of owner-occupiers, loans declined by 2.5 per cent to $22.9 billion.
The agency’s head of finance and wealth, Katherine Keenan, noted that this was the largest fall since May 2020. By the end of the second quarter, home building approvals had also decrease by 6.7 per cent to 18,911. Nevertheless, according to Keenan, owner-occupier commitments remained 76 per cent higher in comparison to a year ago and 64 per cent higher than pre-COVID levels in February last year.
Meanwhile, the RBA has revealed that the outlook of the entire economy for the coming months remain uncertain, as it decided to keep its interest rate policies unchanged, including the cash rate which is currently at a record low of 0.10 per cent. “The economic recovery in Australia has been stronger than was earlier expected. The recent outbreaks of the virus are, however, interrupting the recovery and GDP is expected to decline in the September quarter,” central bank Governor Lowe said in a statement on Tuesday (3 August).
He further noted that based on past experience, despite downturn that may be reported over the next few months, the economy is expected to bounce back quickly once virus outbreaks were contained. Echoing these views, the founder and CEO of Metropole Property Strategists, Michael Yardney, noted that this may be the case in the property market as well. “If lockdowns are extensive our property market will go into hibernation for a while and then come out stronger than ever, just like they did last year,” he said.
