The Reserve Bank of Australia may be concerned about the risk of an overheating housing market in the future.
However, economists do not expect it to make any short-term monetary policy changes when its board meets for the first time this year on Tuesday.
According to the Australian Bureau of Statistics, the value of new owner-occupier home loan commitments increased by 8.7 percent to $19.9 billion in December, up 38.9 percent from the previous year.
The number of owner-occupier first-time home buyer loans increased by 9.3 percent, representing a 56.6 percent increase since December 2019.
“Federal and state government measures, such as homebuilder, and historically low interest rates are supporting ongoing growth in housing loan commitments,” said Amanda Seneviratne, ABS head of finance and wealth.
Demand for mortgages from first-time buyers is now at its highest level since June 2009, when a temporary tripling of a first-home owner grant to help combat the global financial crisis triggered similar rapid growth.
Separate data show that house prices across the country rose by 0.9 percent in January, bringing them to 0.7 percent above the previous September 2017 peak.
Regional property values grew at twice the rate of capital city housing markets, with the disparity more pronounced in Sydney and Melbourne, both of which are suffering from a lack of overseas migration.
“Better housing affordability, the opportunity for a lifestyle upgrade, and lower density housing options are other factors that may be contributing to this trend, as is the newfound popularity of remote working arrangements,” said Tim Lawless, CoreLogic research director.
Shane Oliver, chief economist at AMP Capital, believes the reserve bank may become concerned about the pace of the recovery in lending commitments and house prices.
“At the very least, it would make sense for home borrower incentives to be wound back and not extended in the coming months,” Oliver said.
“It will likely remain premature for the RBA to begin raising interest rates... given the wider economy's continued uncertainty and spare capacity.”
According to the prime minister, Monday's data releases are yet another sign of Australia's rapid recovery from last year's recession.
“The economy is already on the mend and outperforms the experience of the majority of advanced nations in the world today,” Scott Morrison told the National Press Club.
“Australians are now voting with their feet to participate in the economic recovery,” he added, referring to the unexpected drop in the unemployment rate to 6.6 percent.
But the shadow treasurer, Jim Chalmers, said the PM blew an opportunity to explain what he would do for the two million Australians who can't find work or are working too many hours.
According to new job posting data, additional job growth is likely in the first half of 2021.
The ANZ jobs series increased by 2.3 percent in January, marking the eighth consecutive monthly increase, and is now at its highest level since April 2019.
Simultaneously, manufacturers have used the typically quiet year-end holiday season to make up for business lost during the recession.
The Australian Industry Group's manufacturing performance index increased by 3.2 points in the last two months to 55.3 points, indicating that the sector is expanding.
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Source: Australian Associated Press (theguardian.com)
