Consumer confidence is falling and that’s not good.

Consumer confidence is falling and that’s not good.

Or maybe it is…if you’re keen to act counter cyclically!

The ANZ-Roy Morgan Australian Consumer Confidence index dropped by 3.4% last week, with all the confidence subindices falling. Downturn

Having said that overall confidence is still above the long term averages.

As a business owner and property investor I keep a careful track of consumer confidence as it gives a great indication on what’s ahead.

Perception is reality – is consumers lack confidence they won’t spend – they’ll sit on the sidelines with their hands in their pockets.

Of course savvy investors will see the fall in the latest “Time to Buy a House” index as a great countercyclical opportunity recognising that downturns are temporary (just look at the long term graph below) while the long term capital appreciation of well located residential real estate is permanent.

time to buy a house

The overall drop in consumer confidence took the index to a three-month low.

Consumer confidence is falling and that's not good.

Consumer confidence is falling and that's not good.

Roy Morgan report that: 
what properties are investment grade

  • Current financial conditions fell sharply, falling by 7.1%. Sentiment toward current financial conditions is back to where it was in November, but still quite some way above the long-run average. Future financial conditions fell by a more subdued 1.6%.
  • Current economic conditions fell by 3.2%, its first fall after three straight weekly gains, while future economic conditions fell by 3.8%.
  • The ‘time to buy a household item’ index fell 1.6%, its fourth straight weekly loss and taking it back to where it was at the end of October.

ANZ’s Head of Australian Economics, David Plank, commented:

“Consumer confidence took a beating last week, most likely on the back of the RBA’s downgrade to its economic outlook. The fall reversed all the gains and then some since the weak reading seen at the start of this year. Weak retail sales and building approvals data may also have negatively impacted sentiment. Confidence still remains above the long-run average, however, as does the key current financial conditions sub-index. So we aren’t giving up on the consumer just yet.”

Future economic conditions closes below long-term average

 

Future financial conditions still above average

icon-podcast-large

Subscribe & don’t miss a single episode of Michael Yardney’s podcast

Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.

Need help listening to Michael Yardney’s podcast from your phone or tablet?

We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.

icon-email-large

Prefer to subscribe via email?

Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.


Michael Yardney

About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'Consumer confidence is falling and that’s not good.' have no comments

Be the first to comment this post!

Would you like to share your thoughts?

Your email address will not be published.
CAPTCHA Image

*


facebook
twitter
email