Such high demand for properties coupled with strong population growth, rent prices are rising and tenants are finding it increasingly difficult to find a suitable property. This ultimately means residential property investors are in a strong position.

Honestly, does this look like a recession? Confidence soars; home loans at 11-month high. The number of new housing loans is at 11-month highs, lifting by 0.4 per cent in February. First home-buyers account for almost 27 per cent of home loans taken out – the highest on record. Banks account for over 92 per cent of all loans – a 33-year high. Consumer confidence surged to 13-month highs in April.

• Honestly, does this look like an economy in recession – confidence levels are soaring and home lending is again on track to record highs.
• The raft of stimulus packages and rate cuts are working, with the extra dollars lifting spending power and boosting spirits. Aussie consumers have been hit by all manner of bad news over the past year but its amazing how a splash of cash can put smiles back on the dials. A combination of stable petrol prices, a firmer sharemarket, super-low interest rates and government handouts are serving to soothe jangled nerves and making consumers more positive about life.
• An average wage earner paying off a $300,000 home loan is saving $770 a month of repayments compared with September last year – equivalent to a 20 per cent pay rise. Many Australians are substantially better off than a year ago.
• There is a lot of talk about job losses, but at most 2-3 per cent of Australians are affected. More important is what is happening to interest rates, the housing market and fuel prices. In 2001 when unemployment rose, consumer sentiment rose by over 20 per cent.
• The sharp improvement in consumer sentiment validates the Reserve Bank decision to cut rates only 25 basis points. Clearly the RBA is more in touch than market economists, many of whom never travel outside city centres.
• The main problem for first home buyers is that there are so many people in the market at present competing for the limited supply of houses and land. Super-low interest rates and the government grant have substantially boosted purchasing power, but the only problem is that the strong demand is pushing up prices.
• What the housing market needs at present is more investors and developers. Unless more houses and apartments are built, the surge in buying interest by owner-occupiers may only result in higher prices.
• A record $43 billion in home loan commitments have been made by lenders but the dollars haven’t gone out the door. A wall of money is on the sidelines ready to flood into the housing market.