People may be clamouring for a mortgage but buying a home is not lifting their spirits.
Mortgage lenders had one of their busiest months in about four-and-half years in February, with 52,460 home loans granted.
However, other data released on Wednesday showed consumer confidence barely rose in April and sentiment fell among people with a mortgage.
This was despite the Reserve Bank keeping the cash rate stable, ongoing positive news on the housing market and a sharp 47,300 rise in employment in February.
Westpac chief economist Bill Evans described the mere 0.3 per cent rise in April consumer sentiment as a “mild surprise”, when a larger recovery was expected to counter a near 10 per cent drop since November.
It left the Westpac-Melbourne Institute consumer sentiment index at 99.5 points and below the key 100 level that indicates there are more optimists than pessimists.
Thursday’s labour force data for March are likely to be crucial to determining consumer mood and future spending behaviour.
“Most leading indicators of employment have now turned positive and are providing bullish signals for employment over the next twelve months,” Pitcher Partners Investment Advisory head of research Andrew Aylward told AAP.
He believes employment will continue to rise slowly but pick up in the second half of the year once the federal budget announcements are known.
But other data on Wednesday was less positive on the employment outlook.
The Department of Employment’s jobs indicator fell for a sixth straight month in April, signalling employment is likely to grow more slowly over the coming months than its long-term trend rate of 1.1 per cent per annum.
Furthermore, the International Monetary Fund’s latest World Economic Outlook predicts Australian economic growth remaining below three per cent until at least 2016, a level deemed necessary to cut unemployment.
The IMF says while economic growth among major economies is improving, it is still far short of a full recovery. It made a minor cut to world growth over the next two years.
G20 finance ministers will be thrashing out ways to lift economic growth at a two-day meeting in Washington starting on Thursday, backing up an historic commitment they made in Sydney.
In February, Treasurer Joe Hockey secured an agreement, as chair of the meeting, to lift economic growth by an additional two per cent over current projections over the next five years.
This is expected to lift global economic activity by an extra $US2 trillion ($A2.14 trillion) and create tens of millions of additional jobs.
Treasury’s Barry Sterland, who is a G20 finance deputy, said it’s an aim worth pursuing in the current environment.
“It is the issue that responds to the modest recovery we’ve got,” he told AAP from Washington.