Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
Australians appear to have a spring in their step after suffering the doom and gloom of the pandemic, with confidence soaring and people becoming more ready to take on a home loan.
Australian Bureau of Statistics figures show the value of new loans for owner-occupied housing jumped 10.7 per cent in July, the largest month-on-month on record.
First-time home buyer loans also surged 1.4 per cent.
The bureau put this strong demand for credit down to the easing of COVID-19 social distancing restrictions in most states and territories.
“New loan commitments for owner-occupier housing rose in all states and territories, except the Australian Capital Territory,” ABS head of finance and wealth Amanda Seneviratne said.
“The largest increases were in New South Wales, Victoria and Queensland.”
However, the data predates Victoria first entering into its harsh COVID-19 lockdown.
Fixed-term personal loans also rose, but lending to small and medium-sized businesses decreased after rising strongly in June.
Meanwhile, the monthly Westpac-Melbourne Institute consumer sentiment index released on Wednesday roared back by 18 per cent in September after dropping 9.5 per cent in August.
This recovery came despite confirmation last week the nation is in recession for the first time since 1992.
“Clearly this was ‘old news’ with respondents more focused on the future,” Westpac chief economist Bill Evans said.
He said the confidence fall in August was in reaction to the deteriorating virus situation in Victoria and the introduction to harsh lockdown measures in the state.
Adding to concern was the slump in NSW.
“We suspected last month’s 9.5 per cent collapse in the index was an overreaction but this month’s 18 per cent rebound is a pleasant surprise nonetheless,” Mr Evans said.
However, the September survey was completed before last weekend’s announcement by Victorian Premier Andrews of a slow move to reopening its economy.
Consumer confidence is a guide to future household spending.
However, Mr Evans warned progress in managing the virus and the opening up of economies still remained key to the outlook.
Every quarter, respondents are surveyed on what news they recall most and their assessment of it.
News on “economic conditions” had a recall of 42 per cent, the highest proportion in almost nine years.
“News on this front was still assessed as overwhelmingly unfavourable,” Mr Evans said.
However, views on “budget and taxation”, “interest rates” and, most notably, politics received favourable assessments.
Mr Evans said the latter should be welcome news for Australia’s federal and states politicians with an extraordinary 70 per cent of consumers assessing political news as favourable.
“A result unlike any seen in the 45-year history of the survey and further evidence of what is proving to be a very strange recession,” Mr Evans said