[ad_1]
Westpac’s cash earnings for the first quarter of the year were up 54 per cent on the back of a significant increase in home loan applications as buyers scurry to secure real estate.
The bank recorded cash earnings of $1.97 billion on Wednesday, which was higher than the $808 million quarterly average recorded in its second half last financial year.
Westpac’s boss Peter King said the bank had a good start to the year with higher earnings while the economy recovers from the pandemic.
Mr King added there is “momentum in mortgages” with “a significant increase in applications” even though there is $11 billion in deferred home loan repayments due to COVID-19.
RELATED: Aussie house prices set to explode
RELATED: Biggest risks to the Aussie economy
Billions of dollars in home loan repayments accumulated when major banks enabled customers who had lost their jobs in 2020 from the pandemic to pause their mortgage repayments.
Mr King said he expects this figure to drop in February and March this year as homeowners pick up their repayments again, which will help if the unemployment rate keeps sliding.
Low interest rates, rising housing prices, a boost in consumer confidence and increased construction activity has bolstered the recent increase in home lending.
This comes after Commonwealth Bank made a bold forecast, predicting house price growth of 8 per cent this year after the bank recorded a cool $5 billion in the last six months alone.
CoreLogic data released on Monday suggested the introduction of HomeBuilder may have skewed demand toward houses, with new home sales in the December quarter almost 100 per cent higher than in the same quarter of 2019.
Australia’s economic recovery from the COVID-19 pandemic is well under way and in some cases stronger than expected, but there are risks and signs of weakness, showing there’s still a fair way to go to relative stability, central bank minutes suggest.
In minutes from the latest Reserve Bank of Australia meeting released on Tuesday, the board noted there had been strong growth in employment and a welcome decline in the unemployment rate, underpinned by Australia’s success on the health front and very significant fiscal and monetary support.
[ad_2]
Source link
