- Australia’s economy continues to rebound, according to CBA and Google data
- Consumers’ buying intentions for homes, entertainment and travel jumped in March
- Home buying intentions leapt to a record high, at +30%
Australia’s economy continues to rebound and consumers’ buying intentions – especially for homes, entertainment and travel – jumped in March, according to Commonwealth Bank of Australia (CBA) and Google data.
Home buying intentions set a new series high in March as both home loan applications and Google property searches increased again.
“We continue to see demand for residential property as a key source of support for the Australian economy in 2021.”
Stephen Halmarick, CBA Chief Economist
He added that low interest rates were also contributing to this trend. The CBA is also expecting residential property prices in Australia to rise 8% in 2021 and another 6% in 2022.
The Housing Spending Intentions (HSI) series offers a forward-looking view by analysing actual customer behaviour from CBA’s transactions data, as well as household spending search activity from Google Trends.
Household Spending Intentions (HSI) – HOMES, Mar 2021
Travel, tours and entertainment
Entertainment spending intentions were also sharply higher in March, as the ‘base-effect’ highlighted the stark difference in the sector’s outlook when compared to last year.
“The travel sector was among the hardest hit by the onset of the COVID pandemic, with border closures and a country-wide lockdown stifling nearly all travel-related activity,” Mr Halmarick said.
“This month’s data, while distorted by base-effects, still demonstrates how far the sector has recovered since last year.”
For the year to March, there was also a strong increase in spending intentions for amusement parks and aquariums, as well as hotels, motels, resorts and motor home and RV rentals.
However, the annual pace of spending for airlines, cruise ships, timeshare, travel agents and bus lines all posted declines, indicating that the industry’s rebound remains patchy.
“A year ago bars, clubs, restaurants and movie theatres wrangled with the swiftly escalating restrictions in the lead-up to a country-wide lockdown. This March, the picture for this sector is much improved, as pent-up demand among consumers helped spur both actual and prospective spending on the category,” Mr Halmarick said.
Retail down, after strong recovery
Retail is a mixed bag. Looking at March in isolation, spending intent is down, but it is still as strong as it has been over many years, and is only less compared to the sharp recovery the sector enjoyed coming out of its Covid doldrums in mid-2020.
Some retail also did quite well in March 2020, due to the amount of panic-buying and home office purchases that resulted.
Household Spending Intentions (HSI) – RETAIL, Mar 2021
Relative to March last year, the statistics show strong increases in spending on clothing & footwear, department stores, furniture and home equipment stores, hardware stores, jewellery & watch stores, luggage & leather goods, beauty stores & barbers, cosmetic stores, health spas, digital apps, electronic stores and florists.
The CBA is also forecasting economic growth for the country to hit 4.7% in 2021, with unemployment levels down to 5%. That’s about as fast as the economy has grown in decades, albeit from its first recession (two successive quarters of negative economic growth) since 1991.