First home buyers appear to be giving up chasing ever-rising house prices, with demand for mortgages dropping sharply for a second month in a row.
The same cannot be said for China's unquenchable thirst for iron ore, which helped push Australia's trade surplus to a record $12.1 billion in July.
Australian Bureau of Statistics figures on Thursday showed first home buyer loans fell 6.8 per cent in July, following a 7.8 per cent decline in June, and have now fallen 20 per cent since January 2021.
"First home buyer activity will continue to wane with housing affordability deteriorating and stimulus measures like HomeBuilder having concluded," BIS Oxford Economics economist Maree Kilroy said.
Data released this week showed signs of the housing boom coming off the boil due to affordability constraints.
However, that isn't stopping housing investors stepping into the void.
Loans taken out by investors rose by a further 1.8 per cent in July to be a huge 98.7 per cent higher over the year.
"Investor loan commitments have seen an unbroken period of growth since October 2020," ABS head of finance and wealth Katherine Keenan said.
Meanwhile, a five per cent increase in exports propelled Australia's trade surplus to a record $12.1 billion in July, compared to a revised surplus and previous peak of $11.1 billion in June.
Imports were three per cent higher.
The rise in exports was driven by a seven per cent increase in non-rural goods, notably through strong demand for iron ore from China.
This continued strong demand for the steel-making red metal comes despite ongoing trade tensions with China, which has already seen the Asian giant block several commodities from Australia.
"My feeling is these tensions are going to be here for a while," AMP Capital chief economist Shane Oliver told an S&P Global Ratings online panel discussion.
"But by the same token, it is very hard for China to switch to alternative supplies of iron ore. Australia accounts for 50 per cent of iron ore exported globally and there is not enough supply elsewhere to turn that off."
That online discussion also found economists are not as confident as Treasurer Josh Frydenberg that the economy will bounce back strongly after an expected downturn in the September quarter.
Treasury is estimating an economic contraction of at least two per cent in the September quarter, reflecting the full impact of COVID-19 lockdowns in NSW and Victoria.
However, Mr Frydenberg is banking on strong rebound in activity - similar to the recovery from last year's recession - once vaccination rates hit 70 and 80 per cent and restrictions are eased.
RBC Capital Markets chief economist Su-Lin Ong is expecting a larger quarterly contraction of three per cent and a slower recovery.
"The odds are we are never going back to zero-type cases, there are likely to be restrictions of some sort well into probably late this year and even into early next year," Ms Ong told the panel.
"That is going to temper activity. I don't think we are going back to the type of world we were in prior to Delta.
HSBC chief economist Paul Bloxham has a similar view.
"We had 'V' shaped recoveries last year because we got back to zero cases and we reopened," he said.
"This time round we think the recovery is going to be much, much more gradual."
However, they both thought there would be a partial recovery in the December quarter, avoiding a technical recession of two consecutive negative quarters.