Despite the turmoil of global markets, Australians are optimistic about the Australian property market and the state of the economy as a whole, according to the latest report from CUA.
The ‘Borrowing and Investments Intentions Survey’, conducted by Auspoll, was undertaken 18-21 October. Of the 1507 Australians surveyed, 58% felt confident that the economy will remain strong and stable over the coming year, with 61% believing Australia will cope better with the current financial instability than Europe or the US.
In relation to the Australian property market, 58% of respondents were optimistic about it improving over the next five years. Of the 33% who intend to take out a loan, more than half (52%) intend to purchase either an investment or residential property.
CUA’s group general manager, strategy and marketing Andrew Hadley said that the Reserve Bank of Australia’s recent interest rate cuts would help to further drive this positive outlook for the Australian economy.
“As a nation we have been shoring up our savings and been cautious about making any major purchases and this has been particularly noticeable in the property market,” Hadley said.
According to a September report from Datamonitor (based on a survey of 2,000 Australian aged 18 or above), the proportion of consumers who have bought or are intending to buy an investment property grew from 5 per cent in 2009 to 9 per cent in 2011.
Since this survey was undertaken before the Cup Day interest rate drop. Earlier this year “the market” and the typical Australian property investor was expecting 3 or 4 interest rate rises and stood on the sidelines waiting to see how this would affect our markets. At the same time they started saving, paying down debt and their credit cards.
I’m sure if a similar survey was taken today, there would be more confidence in our property markets considering that no one expects rates to rise for some time now.
Clearly there are still issues overseas and one small interest arte drop really won’t make much difference to the fundamentals. But it’s nice having some good news for a change.
If you’re interested in what property commentator Michael Matusik thinks of the interst rate cut read his article – Interst rate cuts are a big nothing.
Source: Money Management
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