The desire of Australians to purchase a dwelling remained high, with the latest study from Commonwealth Bank showing a sustained increase in home buying intentions.
The study found that home buying intentions in February have reached the highest level since 2015. Factors such as the growth in mortgage applications and the high volume of web searches reflect these intentions.
"We continue to expect the home buying market to be a key source of support for the Australian economy in 2021 — driven largely by the very low level of interest rates," the study said.
This level of intention, if translates to demand for housing, could result in house prices to grow by 9% this year.
Spending intentions for entertainment, travel, education, and health were also on an uptrend during the month. Potential spending for retail and motor vehicles remained muted.
The strong showing in the spending intentions for the majority of categories point to a continued economic recovery, said Stephen Halmarick, chief economist at CBA.
"Fourth quarter data showed that economic growth improved further at the end of 2020, with a 'V-shaped' recovery and we now expect that the Australian economy will grow by 4.4% in 2021," he said.
One risk that could potentially impact this outlook is the expiry of the JobKeeper program, though the study suggested that it might only be temporary.
"Our view is that the negative impacts of the end of JobKeeper will be short-lived and that the strength in the labour market, the large savings pool generated throughout 2020 and, as shown by the HSI, the solid momentum in spending and home buying, will see the economy transition successfully through the end of JobKeeper," Halmarick said.