Commonwealth Bank's home buying spending intentions hit record highs in February

The home buying spending intentions, part of the Commonwealth Bank Household Spending Intentions (HSI) series, saw further gains across February, reaching its highest level since the data series began in 2015.

Both mortgage applications and Google searches were up in February in comparison to the month and year prior.

CBA chief economist Stephen Halmarick said the overall improvement in the HSI data is consistent with other signs that Australia’s economy continued to recover in the early months of 2021.

"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," Mr Halmarick said.

CBA are continuing with their forecast that property prices will be up eight per cent in 2021 and six per cent in 2022, with house prices expected to be nine per cent higher this year.

Mr Halmarick said Commonwealth Bank now expect the Australian economy will grow by 4.4 per cent in 2021 following the economic growth improvement at the end of 2020 pointing to a V-shaped recovery.

One risk to this outlook is the upcoming expiry of the JobKeeper program, though Mr Halmarick said recent CBA research suggests any effect from removing the labour market support measure is likely to 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,” he said.