Property performance indicators unaffected by virus fears

Figures were up by 3.1 per cent month-on-month to 28,525 in seasonally adjusted terms.

According to BIS Oxford Economics economist Maree Kilroy, “all demand segments performed strongly”.

First-home-buyer borrowing was up by 3.2 per cent alone in volume terms month-on-month for January.

Ms Kilroy noted January was “the first month in which we see the effect of the First Home Buyer Deposit Scheme in action”.

“With a strong take-up reported by brokers and banks, strength in home-buyer lending is expected to persist over February and March,” she added.

This is despite the economist noting the COVID-19 outbreak as creating “a major hit to economic activity in 2020”.

But “it is yet to show any real impact on the residential property market”, with Ms Kilroy pointing out that almost all lead indicators remain positive, including auction clearance rates and property prices.

She is expectant of a further cut to the cash rate in April, after the previous 25 basis point drop in response to the COVID-19 threat.

The economist outlined that this would take the cash rate to “its effective lower bound of 0.25 [of a percentage point] and discounted owner-occupier mortgage interest rates to as low as 2.4 per cent per annum”.

“While stimulatory, it is expected that the boost from these rate cuts will be fully neutralised by elevated household anxiety over 2020,” she concluded.