“A further rise in advertised supply is good news for buyers, but for vendors, it means more competition and the potential for a softening in selling conditions.”
CoreLogic’s measure of rents increased by 0.1 per cent through the September quarter, the smallest change in a three-month period in four years.
Commonwealth Bank data suggests the stage 3 tax cuts are being used to pay down debt rather than go on a shopping binge.Credit: Oscar Colman
Rents fell by 0.5 per cent in Sydney, by 0.2 per cent in Brisbane and by 0.8 per cent in Canberra over the past three months, while they rose by 0.3 per cent in Melbourne and Perth.
Lawless said a slowdown in net overseas migration and the large jump in rents over the past two years were now hitting the rental market.
“Our affordability metrics indicated that the median income household would require around a third of their income to service the median rent value across Australia in June,” he said.
“It wouldn’t be surprising if the average household size has continued to increase as group households and multi-generational households become more common in the face of high rental costs.”
The Reserve Bank has previously raised concerns that high house values encouraged home owners to spend via the “wealth effect”.
There have also been worries that the stage 3 tax cuts, worth $24 billion in their first year of operation, would also add to inflationary pressures.
But data compiled by the Commonwealth Bank shows that despite its customers receiving more in income since the start of the tax cuts, there has not been a commensurate increase in spending.
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Senior economist Stephen Wu said while there had been an uptick in spending through August, this had eased through the first three weeks of September.
He said the extra cash going into bank accounts was being diverted into mortgage offset accounts or paying down other forms of debt.
“The widening gap between spending and income growth naturally means ‘economic savings’ have increased,” he said.
“Households are choosing not to consume out of the tax cuts, but are paying down their debt ahead of schedule. Flows into offset and redraw accounts over the year through to August have been rising sharply for CBA customers.”
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