Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
There are further early signs that Australia’s housing boom is cooling, with demand for home loans and applications to build homes falling.
It may provide some comfort for the Reserve Bank of Australia as it holds its monthly board meeting on Tuesday.
However, the central bank has bigger concerns faced with an economy that is fast deteriorating due to the impact of a series of lockdowns across several states.
New Australian Bureau of Statistics data shows the value of new home loans fell 1.6 per cent in June to $32.1 billion. For owner-occupiers, loans fell by 2.5 per cent to $22.9 billion.
“While this was the largest fall since May 2020, owner-occupier commitments remained 76 per cent higher compared to a year ago and 64 per cent higher than pre-COVID levels in February 2020,” ABS head of finance and wealth Katherine Keenan said.
The number of home building approvals also fell 6.7 per cent to 18,911 in June, including an 11.8 per cent tumble in private sector houses to 12,037.
This was the third consecutive monthly decline reflecting the unwinding of pandemic stimulus measures, such as HomeBuilder, the ABS said.
Economic circumstances have changed markedly since the RBA board last gathered in early July.
In July, RBA governor Philip Lowe was talking about a “positive path” for the economy after recovering from last year’s recession stronger than expected.
But four weeks on, the outlook has darkened with economists now predicting a sharp economic contraction in the September quarter.
This is largely the result of the lengthy virus lockdown in Greater Sydney and regional NSW areas.
Last month’s lockdowns in Victoria and South Australia will have also left a negative mark, as will the current restrictions in Queensland.
Unsurprisingly, confidence among Sydneysiders fell sharply in the past week following the extension of the NSW virus lockdown to the end of this month.
However, Australians have got a spring back in their step in other parts of the country after restrictions were eased in Victoria and South Australia.
Overall, the weekly ANZ-Roy Morgan consumer confidence index – a pointer to future household spending – rose 1.1 per cent after two weeks of hefty falls.
Confidence slumped by seven per cent in Sydney, but was partly offset by a two per cent rise in Victoria and a 2.9 per cent increase in South Australia.
Sentiment in Brisbane was also up 2.7 per cent, but the majority of the survey was completed before the three-day lockdown in southeast Queensland was announced, ANZ head of Australian Economics David Plank noted.
That snap lockdown has since been extended until next Sunday.