Will APRA Stop the Post-Pandemic Housing Boom?

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>In this TUD+ Briefing, ANZ Research senior economist Felicity Emmett discusses the main risk factors that prudential regulators are facing in the midst of the fastest growth in house prices in decades.</p><p>Elevated activity in the housing market, which has pushed up home prices, including 2.8 per cent growth in March, has increased pressure on regulators.</p><p>Emmett discusses the key drivers affecting the run-away housing market and the policy levers available to regulators. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><iframe sandbox="allow-forms allow-scripts allow-pointer-lock allow-same-origin allow-top-navigation allow-presentation" class="embed-responsive-item" allowfullscreen="" frameBorder="0" style="max-width:574px" width="100%" height="323" src="https://www.youtube.com/embed/Qqrb5-UX8r8"></iframe></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p style="text-align:center"><strong>You are currently experiencing </strong><em><strong>The Urban Developer</strong></em><strong> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans"><u><strong>Click here</strong></u><strong> to learn more.</strong></a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/4fb872c4-2507-449c-af93-4c928c2ed849.png" width="800"/></picture><div></div></div></div></div></div></div></div>

ANZ senior economist Felicity Emmett discusses the main risk factors that prudential regulators, such as APRA, are facing as house prices surge...

ANZ Interest Rates

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Is the party almost over for Australia’s low interest rates? </p><p>After one of the strongest 12-month cycles in living memory, and inflation fears grow, there is mounting pressure on the RBA to confirm whether interest rates will rise before their mandated 2024 date.</p><p>But regardless of the RBA’s actions, Australia’s big four banks are making moves, adjusting both variable and fixed rates.</p><p>In this TUD Plus Briefing, ANZ senior economist Felicity Emmett explores what the bank is thinking about the timing of a rate rise, how inflation and wages will fare in coming years and the question for intervention.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><iframe sandbox="allow-forms allow-scripts allow-pointer-lock allow-same-origin allow-top-navigation allow-presentation" class="embed-responsive-item" allowfullscreen="" frameBorder="0" style="max-width:574px" width="100%" height="323" src="https://www.youtube.com/embed/lNH_Qzm43zE?rel=0"></iframe></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>“The RBA has been very clear that it doesn&#x27;t think interest rates are the appropriate tool to slow house prices,” Emmett said.</p><p>“House prices really are not in the RBA’s mandate, and neither is it for APRA, the regulator, but what they and others do care about is the growth that we’ve seen in housing credit and the fact that that very strong growth has actually come at a time when income growth has been quite weak. </p><p>“So, what the regulators are concerned about is that people are perhaps getting themselves too indebted.” </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>You are currently experiencing </strong><em><strong>The Urban Developer</strong></em><strong> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a><strong></strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/4fb872c4-2507-449c-af93-4c928c2ed849.png" width="800"/></picture><div></div></div></div></div></div></div></div>

With inflation fears growing , the ANZ’s Felicity Emmett explains what, and when, they think the RBA will do with interest rates...

House Price Forecast ANZ

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The ANZ has upgraded its housing market forecasts, tipping house prices to lift by 6 per cent next year before falling by 4 per cent in 2023 as the post-pandemic boom cools.</p><p>The bank is predicting the strongest gains will be in Brisbane, lifting by 9 per cent, Hobart by 8 per cent; and Melbourne by 7 per cent. </p><p>Sydney, where the median house price is a <a href="https://www.theurbandeveloper.com/articles/sydney-housing-market-update">record-breaking $1.5 million</a> after a 30.4 per cent surge, will moderate to 6 per cent next year before dropping by 4 per cent in 2023.</p><p><a href="https://www.theurbandeveloper.com/articles/anz-shares-rates-predictions-rba">ANZ chief economist Felicity Emmett </a>said affordability constraints and higher mortgage rates would mean that the gains in house prices over the past year would not be repeated in 2022. </p><p>“We expect housing construction to grow another 15 per cent by mid-2022, before activity brought forward by government incentives starts to dry up,” Emmett said. </p><p>The Reserve Bank of Australia recently reiterated its <a href="https://www.theurbandeveloper.com/articles/house-prices-rise-through-interest-rate-hikes">stance that the cash rate would not be changed</a> until inflation is sustainably within their 2 to 3 per cent target range, implying a requirement for tighter labour markets and a “material” boost in wages growth before the inflation requirement is met.  </p><p>ANZ said it expected the RBA to leave the cash rate— currently at 0.1 per cent—on hold until the first half of 2023. </p><p>APRA said the move aimed to reinforce the stability of the system and ensure borrowers could meet the level of debt they took on today and in the future.</p><p>“Another lift in the buffer or a measure which targets a combination of high debt-to-income and high-LVR loans is the most likely in our view,” Emmett said.</p><p>“But financial conditions are already tightening and the market may do some of APRA’s work for it. </p><p>“Indeed, the rise in fixed mortgage rates over the past few weeks may see lending slow enough to obviate the need for further macroprudential measures.”</p><p>The total value of residential real estate in Australia is now worth a record-breaking $9.1 trillion—almost a third more than all superannuation, the ASX and commercial real estate combined.</p><p>Low interest rates, which have propelled market growth, and the increase in housing prices has since <a href="https://www.theurbandeveloper.com/articles/what-rbas-end-of-ultra-cheap-money-means">pushed up the level of debt Australian homeowners have entered into</a>.</p><p>Corelogic head of research Tim Lawless said any early lift in interest rates posed additional downside risk for housing values as well as the economy as a whole.  </p><p>“We are already seeing the rate of house price appreciation ease due to affordability pressures, rising stock levels and, as of November 1st, tighter credit conditions,” Lawless said.  </p><p>“Once interest rates start to lift, there is a strong chance that housing prices will head in the opposite direction soon after.”</p><p>Last month, Westpac <a href="https://www.theurbandeveloper.com/articles/australian-house-price-forecast-westpac-2022">updated its forecasts </a>with similar expectations for housing prices to lift by 8 per cent next year before moving into a “correction phase” and dropping by -5 per cent the year after. </p><p>Harcourts Australia chief operating officer Lisa Pennell told <em>The Urban Developer</em> the plethora of forward predictions, despite their “good intentions”, usually failed to hit the mark, as the market is “inherently difficult to forecast”. </p><p>“Never would this uncertainty be greater than in the midst of a global pandemic with so many variables at play,” Pennell said.</p><p>“Almost 18 months ago the popular predictions were for a major crash—so we would not hazard a guess on what may or may not happen two years down the track.</p><p>“What we can say is that while supply has increased post NSW and Victoria lockdowns providing more opportunities for buyers who’ve been waiting in the wings for some time, demand remains healthy and we expect to trade strongly throughout the remainder of the year.”</p></div></div></div></div></div>

  ANZ has upgraded its housing market forecasts, tipping house prices to lift by 6 per cent next year before falling -4 per cent in 2023...

2465d9b9-5ac7-4e06-9c91-fb873406ea96

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>With property prices on course to lift to <a href="https://theurbandeveloper.com/articles/how-long-until-housing-values-reach-a-new-record-high">record highs</a> in the first half of 2020, <a href="https://theurbandeveloper.com/articles/investors-first-home-buyers-drive-12pc-rebound-in-lending">first-time buyers</a> and those <a href="https://theurbandeveloper.com/articles/buyers-back-in-the-market-as-auctions-rebound">re-entering the market</a> could soon be priced-out, further eroding any renewed prospects of housing affordability. </p><p>After almost two years of falling prices of between 10 and 15 per cent in Sydney and Melbourne, the housing market is showing signs of <a href="https://theurbandeveloper.com/articles/house-prices-make-biggest-jump-in-4-years">bouncing back</a> driven by a number of factors including <a href="https://theurbandeveloper.com/articles/075-is-a-record-low-but-dont-think-for-a-second-the-reserve-bank-as-finished-cutting-the-cash-rate">record low interest rates</a>, easier access to credit and more certainty around tax arrangements.</p><p>Housing affordability enjoyed temporary relief over the downturn, seeing an 8.4 per cent fall in prices with dwelling values 6.5 times higher than gross annual household incomes as of June, the lowest level since December 2013.</p><p>According to the latest ANZ-CoreLogic Housing Affordability report, the 8.4 per cent falls in real estate prices nationally—seen over the past two years, has now significantly reversed, with prices in Melbourne and Sydney <a href="https://theurbandeveloper.com/articles/is-the-downturn-over-house-prices-begin-to-rise">rising</a> 6 per cent and 5.3 per cent respectively since May.</p><p>Dwelling values are now outpacing household incomes across all capital cities (with the exception of Perth and Darwin) with over-extended household debt and rising mortgage rates reversing affordability and playing a larger role influencing the broader economy.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/f9d6ab98-1e72-4824-a0a5-7fed211505a6.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Affordability is influenced by interest rates, the size and term of loan repayments, and household income. Image: AAP</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>“We see more urgency coming back into the market and if this trend continues, we could see property prices reach new highs early next year,” Corelogic head of research Tim Lawless said.</p><p>“We have also seen an increase in the number of areas where it is cheaper to buy than rent, which can be attributed to the lowest interest rates since the 1950s together with lower housing prices relative to the market peak.”</p><p>The downturn has seen the number of years to save for a deposit decline drastically, back to 2014 levels, across the country.</p><p>Households are now also dedicating the smallest proportion of their incomes towards paying a new mortgage since early 2004 and renters are spending the lowest proportion of their income on accommodation since 2007.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Housing affordability in numbers</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sub>• 8.6 years - the time it takes a typical household to save 20 per cent deposit for a dwelling based on saving 15 per cent of their gross annual income<br>• 34.4 per cent - the proportion of income needed to repay a 80 per cent loan to value ratio mortgage as of June 2019, the lowest it has been since 2004<br>• 28.5 per cent - the average percentage of household income required to rent a house as of June 2019</sub></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>With prices likely to continue their upward trajectory on the back of the latest rate cut, an increasing number of Australians have little to be excited about.</p><p>The latest wages growth figures released last week by the ABS also has revealed that growth has distinctly slowed, with the worst results since the middle of last year, lifting by just 0.5 per cent.</p><p>Earnings are believed to be on course to grow by just 2.2 per cent for the year and economists expect that number to fall further as unemployment ticks up.</p><p>The ratio of household debt to disposable income is about 190 per cent, according to Reserve Bank calculations, compared to 70 per cent at the beginning of the 1990s that then rose to 160 per cent at the time of the GFC.</p><p>Sydney remains the least affordable market for buyers, followed by Melbourne.</p><p>Last month, the Morrison government has announced further details of its <a href="https://theurbandeveloper.com/articles/first-home-buyers-scheme">first-homebuyer deposit</a> election promise that stands to benefit up to 10,000 Australians each year and is set to kick off from January next year.</p><p>In an attempt to reboot housing sentiment, the government announced price caps for support through the scheme, which is $700,000 for a house in Sydney and $600,000 in Melbourne.</p><p>First homebuyers will only have to save 5 per cent of a deposit under the plan, with the federal government to guarantee the difference of a standard down payment.</p></div></div></div></div></div>

First-time buyers and those re-entering the market could soon be priced-out.

House Prices to Fall 10pc: ANZ

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Weakening household income, reduced population growth and subdued demand will depress the housing market by 10 per cent, according to ANZ.</p><p>The revised forecast, brought ahead by coronavirus shutdown measures, is a sharp reversal from ANZ&#x27;s January <a href="https://theurbandeveloper.com/articles/australias-housing-prices-to-rise-solidly-2020-anz">forecast</a> of 8 per cent dwelling price growth this year.</p><p>ANZ now predicts house prices to fall in Sydney and Melbourne by 13 per cent, Brisbane and Darwin by 7 per cent, Adelaide 6 per cent and Canberra, cushioned by the high proportion of government worker, by 5 per cent.</p><p>Perth&#x27;s housing market is tipped to perform the best with a decline of just 2 per cent over the next two years.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Housing price forecasts, by capital city</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/f0452429-d36c-4f6a-a37c-d5a60fa316c9.jpg" width="1474"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^ * Capital city weighted average. Source: CoreLogic, ANZ Research</sub></sup></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>“We anticipate prices will bottom out in mid-2021 as affordability improves, but the recovery is likely to be relatively gradual given that unemployment is expected to remain above 7 per cent until 2022,” ANZ senior economist Felicity Emmett said.</p><p>ANZ expects unemployment to rise to just under 10 per cent, the highest since the early 1990s recession.</p><p>To date, nearly a third of Australian households have reported a deterioration in their finances due to Covid-19 and analysts expect that number to grow. </p><p>“This collapse in income will create significant uncertainty for households and leave many unwilling to commit to buying or building a home,” Emmett said.</p><p>Emmett noted that markets heavily reliant on sustained population growth, such as Sydney and Melbourne, were likely to experience the steepest declines as a result of the border closures.</p><p>The federal government estimates that Australia&#x27;s net overseas migration is set to fall by more than 85 per cent in 2020-21.</p><p>With the rental market under pressure from both reduced demand and increased supply, the incentive to invest in property is expected to remain low for some time.</p><p>“While the deferral of home loan repayments will help prevent forced sales, the collapse in demand in the face of the extremely uncertain outlook will drive prices lower over the next year or so,” Emmett said.</p><p>The renewed outlook mirrors <a href="https://theurbandeveloper.com/articles/house-prices-commsec">CBA&#x27;s</a> mid-April forecast of a 10 per cent plunge along with <a href="https://theurbandeveloper.com/articles/stimulus-not-enough-to-offset-house-price-falls-ubs-">UBS</a>—in which its “<a href="https://theurbandeveloper.com/articles/ubs-give-three-coronavirus-pandemic-scenarios-for-a-reits">full-pandemic scenario</a>—projects a decline of at least 10 per cent in house prices over the coming year.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Housing construction – contribution to GDP growth</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/089a342d-47f4-4072-9ef7-9b523e5dc4a3.png" width="1456"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^ Source: ABS, ANZ Research</sub></sup></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>As a knock on, ANZ expects housing construction, which had already been falling since mid-2018, to take a substantial hit from pandemic shutdowns</p><p>Construction activity is projected to to decline another 15 per cent through 2020-21, bringing the cumulative peak-to-trough decline to 25 per cent.</p><p>If that was to occur, it would mark the largest decline in construction since the 34 per cent collapse in activity in the wake of the introduction of the GST in 2000-01.</p><p>“Housing construction took more than 0.5pp off growth in the year to December 2019, and looks set to continue to be a drag on growth” Emmett said.</p><p>“The uncertain income outlook and the sharp reduction in population growth will curtail demand from both owner occupiers and investors.</p><p>“We expect construction activity to continue to fall through 2020, bottoming out in mid-2021 before turning higher.”</p></div></div></div></div></div>

Weakening household income, rising supply and subdued demand will push dwelling prices down by 10 per cent.

Wage Subsidy, Deferrals Improve Outlook

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>In an attempt to reboot the economy and keep people in jobs the federal government has announced $130 billion in wage subsidies, the third and largest stimulus package planned to combat the coronavirus.</p><p>The bumper &quot;job keeper&quot; scheme equates to 6.65 per cent of GDP and will provide a flat $1,500 a fortnight per employee for businesses to retain or rehire nearly six million workers.</p><p>Businesses with an annual turnover of less than $1 billion that have experienced a 30 per cent fall in revenue since 1 March will be eligible, while those earning above $1 billion must record a 50 per cent fall in revenue to be eligible for the scheme.</p><p>Workers who have already lost their jobs will be eligible if they were on the enterprise’s books on 1 March while sole traders, self-employed people, partnerships and trusts will also be eligible.</p><p>Prime minister Scott Morrison and treasurer Josh Frydenberg announced the package on Monday afternoon in Canberra. </p><p>In his address Morrison said this “uniquely Australian” solution was created to keep enterprises and their workers connected through to “the other side” of the economic shutdown.</p><p>Despite details of the wage subsidy not being announced until after the market’s close, the Australian share market rallied 7 per cent on Monday—its <a href="https://www.afr.com/markets/equity-markets/asx-rally-to-stall-as-covid-19-cases-near-700k-20200330-p54f43">biggest percentage increase</a> in 40 years.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/d58d20bc-e7ad-4fd8-89ad-6c98fe128f7d.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ The Government last week doubled the JobSeeker payment, previously called Newstart, to $1,100 a fortnight.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Parliament will now be recalled to pass legislation for the job keeper payment.</p><p>Real Estate Institute of Australia president Adrian Kelly said the wage subsidies would allow business owners to keep paying bills, including rents to keep the economy ticking over albeit at a slower pace.</p><p>“This will mean those currently still employed can continue doing what they have been doing in providing goods and services and thus dampen the economic disruption,” Kelly said.</p><p>The total <a href="https://theurbandeveloper.com/articles/coronavirus-stimulus-package-development-construction-industry">stimulus</a> provided by the federal government now sits at $320 billion, equating to 16.4 per cent of GDP, following the $105 billion injection from the Reserve Bank and a number of substantial <a href="https://theurbandeveloper.com/articles/coronavirus-stimulus">fiscal measures</a>.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Australian banks extend loan deferrals</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>In line with the new stimulus package, commercial property landlords have been offered a six month deferral on loan repayments by Australia&#x27;s big four banks, but only if they agree not to evict tenants or terminate leases within that time frame. </p><p>Businesses with total loans equating to more than $10 million would become eligible for relief, after the previous cap of $3 million announced last week was increased.</p><p>The measures rolled out by the Australian Banking Association (ABA) will now enable up to 30,000 more businesses across the country, effected by the pandemic, to be placed into “hibernation” without the burden of crippling debts.</p><p>Combined with measures already announced, $100 billion worth of business loans, it will mean a six-month deferral applying to up to $250 billion worth of loans, with extra cash available to 425,000 businesses to cope with the crisis.</p><p>ABA chief executive Anna Bligh said the new measures, subject to approval by the Australian Competition and Consumer Commission, would effectively extend to 98 per cent of all businesses with a loan from an Australian bank. </p><p>“For commercial property landlords, they provide an undertaking to the bank that for the period of the interest capitalisation, they will not terminate leases or evict current tenants for rent arrears as a result of Covid-19,” Bligh said.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/fa40caa3-32c1-48ee-8785-51297a308504.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Australian Banking Association chief executive Anna Bligh said the extension of support would apply to an additional $100 billion of business loans.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Westpac, the first of the big four out of the gate with extensive support measures, has also thrown its full support behind the emergency support package for business deferring principal and interest repayments on eligible business loans.</p><p>CBA chief executive Matt Comyn said a strong and profitable banking sector would continue to be important in providing the flexibility that customers need in a time of crisis.</p><p>Commonwealth Bank, which has $426 billion of corporate loans, said it would provide repayment relief of up to $3.6 billion for its business customers, delivering around $600 million back into business cash flows each month.</p><p>The extension of loan repayment deferrals to businesses with more borrowings would now mean that around 90 per cent of CBA’s commercial property owners would be eligible.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>NAB also agreed to the sweeping measures which would cover more 150,000 business customers across the country.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The prime minister also has enacted a six-month moratorium on residential and commercial evictions, prevent landlords from evicting tenants if they are unable to pay rent due to financial distress as a result of the current crisis.  </p><p>“It’s a sensible, fair measure and one that we have said should be taken,” Property Council chief executive Ken Morrison said.</p><p>“There is still more to be done however, including in the area of land tax and rate relief for commercial property owners which we will continue to pursue with state and territory governments.”</p><p>Individual state governments are expected to announce more details regarding tenancy agreements early this week.</p></div></div></div></div></div>

Australia’s banks will extend the six month deferral repayments of loans to 30,000 more businesses across the country effected by the coronavirus.

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Consumer confidence is improving as a sense of “normalcy” returns—and a rise in retail spending may be due to consumers dipping into the household travel budget, which is dormant due to Covid-19 travel restrictions.</p><p>Recovering from April <a href="https://theurbandeveloper.com/articles/abs-retail-sales-figures-may-coronavirus">lows</a>, personal retail spending has continued to rise across categories, with very large losses in travel-related and restaurant spending across Australia offset by strong growth in services and grocery spending, ANZ data shows.</p><p>&quot;It seems that when we take into account non-retail spending observed by ANZ, much of the uplift in retail spending may be coming from the household travel budget, which is dormant while international [and] interstate borders remain closed and travel restrictions continue as part of lockdown,&quot; ANZ economists Adelaide Timbrell and David Plank said.</p><p>Some movement-related spending indicates that people are starting to take advantage of gradually-lifting restrictions, with car hire, accommodation, car park and petrol station spending still much lower than May last year, but drifting up.</p><p><strong>Retail growth offsetting travel spend losses</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/eaedd232-f30f-4569-bf86-64270581e325.jpg" width="1448"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^ Source: ANZ Research</sub></sup></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>CBA&#x27;s household card spend data tells a similar story, with spending momentum on an uptrend right throughout May.</p><p>Senior economist Ryan Felsman said that after several months of  &quot;tightening their belts&quot; and &quot;bunkering down&quot;, spending on credit and debit cards by Commonwealth Bank customers continues to pick up.</p><p>&quot;Households have been heartened so far by Australia’s success in avoiding a catastrophic outbreak of the pandemic which has tragically taken so many lives globally. </p><p>&quot;A semblance of ‘normalcy’ is returning with adherence to social distancing measures enabling some businesses to reopen, the kids to return to school and the footy to resume shortly,&quot; Felsman said.</p><p>Spending on apparel and footwear is up by 8.3 per cent, perhaps due to a return to work and colder weather, with Felsman noting &quot;retailers are also reporting that younger Aussies are ‘hoovering up’ fashionable sneakers using their Job Keeper ‘income’ and superannuation withdrawal payments&quot;. </p><p>And while ANZ-Roy Morgan ratings show consumer confidence has improved for eight successive weeks—now up 42 per cent to 92.7 per cent after hitting 65.3 per cent at the height of the pandemic outbreak, its lowest ebb since 1973—sentiment is still below its long-run average of 112.9 points.</p><p>&quot;Consumers remain cautious about their finances and worried about the economic outlook due to high unemployment, elevated household mortgage debt and early signs of an easing in property prices,&quot; Felsman said, adding that concerns also persist about a potential second wave of coronavirus infections, along with uncertainty about the longevity of government support measures.</p></div></div></div></div></div>

A rise in retail spending may be due to consumers dipping into the household travel budget, which is dormant due to Covid-19 travel restrictions ... 

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