January figures show solid data for housing finance reaching highest results since 2014. However, the future is blur due to labour market strains, in the opinion of economists at ANZ Research.
Key quotes
“January was another strong month for housing finance (+4.6% m/m) bringing annual growth to its highest result (23.3% y/y) since January 2014. Both owner-occupier and investor finance grew strongly.”
“While house price data suggest strength continued into February, the outlook for the housing market is more clouded now given the uncertain prognosis for the labour market.”
“The outlook for housing finance and prices is more uncertain now. If COVID-19 pushes up the unemployment rate, this could curb the ability of prospective buyers to take on debt, which would affect mortgage demand. The recent rate cut in March and the likelihood of a further rate cut in the coming months may offset that risk somewhat.”
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