Housing markets in Australia began to cool off towards the end of 2021. Updated regulations for banking institutions in the country should “increase the cost of, and reduce the access to financing,” according to an update from Judo Bank.
This should see house prices in Australia rise “at a much slower pace in 2022 than we have seen over the past 18 months,” the Judo Bank team wrote in their report titled, “SMEconomics Overview: Australia’s economy has a strong platform to grow in 2022.”
As noted in the extensive report, the business community is “optimistic about Australia’s economic prospects.”
Various measures of business confidence across SMEs and large corporations are “at high levels.” Investment intentions “are strong, with the Australian Bureau of Statistics (ABS) survey pointing to a 10% lift in investment in the 2021/22 financial year,” the report from Judo Bank noted.
As mentioned in the update:
“Business profitability has held up despite the various uncertainties and costs associated with the pandemic. Government income support programs have been important, particularly for SMEs in exposed service industries. Strong domestic demand and low interest rates are a positive. But there are many changes, not least rising costs pressures, disrupted supply chains and a shortage of suitable staff.”
The report added that business confidence, based on the NAB survey, increased in October of this year to “the second highest level since the survey began in 1997.”
Confidence has “staged a stunning turnaround as NSW, Victoria and the ACT have come out of lockdown rising from -8 points in August to +21 in October,” the report revealed.
As mentioned in the update, the surge in confidence has “not been matched by business conditions, which are a better reflection of current trading conditions, which rose to +11 from +5 points in September.”
Both confidence and conditions “hit a record high level earlier this year.”
The report from Judo Bank further revealed:
“Trading, profitability, employment and forward orders all registered strong gains in October, reflecting a pickup in economic activity as restrictions were wound down across the southeastern states. The rise in business confidence is a welcome sign that the economy is set to stage a strong recovery at the end of 2021 and into 2022, but there are some concerns underlying the otherwise optimistic disposition of the business community at the end of 2021.”
You can check out the full report here.