Invest
Stronger housing market extends ‘wealth effect’
The strong upward trend in home-buying intentions is translating into higher motor vehicle spending intentions, according to new CBA research.
Stronger housing market extends ‘wealth effect’
The strong upward trend in home-buying intentions is translating into higher motor vehicle spending intentions, according to new CBA research.
The latest data from the Household Spending Intentions Report released by the Commonwealth Bank of Australia (CBA) has shown that sustained and solid upward trend in home-buying intentions is leading to higher motor vehicle spending intentions for the second consecutive month.
According to research from the Reserve Bank of Australia, motor vehicle spending is the form of spending most sensitive to changes in consumer wealth.
The CBA report used its own spending data with Google Trends to provide a view on the changing spending behaviours of Australians and the potential implications for the economy.
The results highlighted that home-buying intentions eased back a little in January, but the strong upward trends remain intact.
Readings in the report remain at levels that indicate further gains in dwelling prices are in the offing, as well as a turn in the residential construction cycle and a positive wealth effect that should help consumer activity.
Buying intentions for motor vehicles have turned decisively higher, according to the report, albeit from a low base.
The improving trend is all the more significant because of RBA’s research, which has revealed that spending patterns on motor vehicles are most sensitive to changes in wealth.
Commenting on the report, CBA chief economist Michael Blythe said trends in the remaining HIS measures are mixed but on the soft side overall, citing the Australian bushfires and coronavirus as having a potential negative impact.
“There are clear signs of a turndown in education-spending intentions and, especially, travel-spending intentions,” Mr Blythe said.
“These sectors have likely been impacted by the combination of the devastating summer bushfires in Australia and the policy response to the coronavirus. Retail, health and fitness, and entertainment-spending intentions all look to be tending sideways.”
“The drag from falling construction activity on consumer spending and the broader economy could be over by mid-year.”
Mr Blythe added, however, that a positive wealth effect that has led to stronger motor vehicle spending intentions could extend to other parts of consumer spending.
RELATED ARTICLES
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more
Property
Twice the demand: the case study behind Melbourne’s first‑home buyer surge
Melbourne has quietly engineered one of Australia’s most consequential housing turnarounds, with first‑home buyer demand running at roughly double the national pace and four of the top five buyer ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more
