Episode Details

I took some time last weekend to look at some articles and commentary that came out about a year ago when the GVC (Great Virus Crisis) was just beginning.

The media was full of negative commentary but in my regular podcasts my guests and I gave a much more measured commentary using our perspective gained from many years in the market, and as a result we were circled by a pack of "hangry" housing bears.

They were all confidently growling that local house prices would slump by the largest margin on record.

Of course, they were fuelled at that time by some crazy forecast from the banks and the perennial negative Perma Bears who were praying for the mother of all housing depressions.

Now the media is full of positive news and most of the bears have gone back hibernating in their caves, but some are still out there telling us the upturn in our property markets is just temporary.

We have an embarrassment of riches, with our economy and our property markets surging ahead.

While much of the commentary is about the micro factors – what's happening on the ground in our property markets, I like to regularly get together with property commentator Pete Wargent in these "Big Picture" podcasts to look at the macroeconomic factors affecting our economy and the property markets to help give you some more clarity about what the future holds so you can make better investment and business decisions.

No fiscal cliff at the end of March

Remember how the property pessimists were worried that we would fall off the cliff due to the many deferred home loans?

Many banks gave temporary relief to borrowers impacted by COVID-19, allowing them to defer payments for a period of time.

However, APRA reports that as of 28 February, a total of $14 billion worth of loans are on temporary repayment deferrals, which is around 0.5 percent of total loans outstanding, down from $37 billion (1.4 percent of total loans outstanding) in January.

Sure, lots of homeowners and property investors took advantage of the mortgage safety net, but they didn't need to use it and are now repaying their debts.

We're not falling off of a fiscal cliff and our banking system is sound and stable – so it's a pity the Negative Nellys created so much stress amongst those who listened to them last year.

Property prices and GST boost state budgets by $7billion

The fastest house price growth in 32 years nationally has fuelled stronger than expected stamp duty revenues while also adding a feeling of wealth for existing homeowners.

We know when we feel wealthy and secure, we will tend to spend more. This all good news to help continue boosting the post-COVID-19 economy.

And this has a flow-on effect on government budgets.

We know our governments have taken on more debt to help us get through the coronavirus crisis, but now it seems that State government budgets are a collective $7 billion better than expected as rapidly recovering housing markets and consumer spending lift goods and services tax and stamp duty collections run ahead of forecasts.

Federal estimates of GST collections are already $5.9 billion ahead of where they were forecast to be just three months ago, while stamp duty estimates have improved in every state by more than a combined $1.5 billion compared to past figures.

The latest home loan figures show that investors are back in the market

The latest ABS figures show the value of new loan commitments for housing fell by 0.4 percent from a record-high $28.75 billion in January to $28.64 billion.

On the other hand, investors are back in the market with lending to investors rising by 4.5 percent in February to 3-year highs of $6.94 billion, while lending to owner-occupiers fell by 1.8 percent to $21.70 billion.

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