Australians' intentions to buy a home stabilised in May, driven by an increase in mortgage applications, according to the Commonwealth Bank of Australia’s (CBA) latest Household Spending Intentions (HSI) study.
Stephen Halmarick, chief economist at CBA, said there was a spike in mortgage applications in May as gains in house prices started to moderate.
"This was especially the case for owner-occupiers looking to lock in low fixed-rate mortgages. Online Google searches related to home buying decreased in previous months and is in line with house price falls for the month," he said.
Figures from CoreLogic show that the national median housing value declined by 0.4% in May, with five of the eight capital city regions recording a drop in prices.
"CBA data has shown a large rise in new mortgage applications taking advantage of low fixed rates and this should help provide support to home buying in the future," the study said.
The HSI study also showed an increase in spending intentions for retail and entertainment. Buying intentions, however, declined for motor vehicles and education.
Travel spending, on the other hand, continued to stabilise. It is expected to be boosted by domestic tourism
"While Australians may not be able to holiday overseas until well into 2021, domestic tourism is likely to get a significant boost in coming months. Australians will no doubt be keen to visit family and friends around the country and use the opportunity to explore the best that Australia has to offer," Halmarick said.
Health and fitness spending also stabilised over the month. The study said this could be due to the spike in sales from bicycle shops and sporting goods stores.
"While we know that the Australian economy is in recession, the path to recovery is becoming clearer," Halmarick said.