How confident do you feel about your job, your financial circumstances and the ability to take on more debt?
Not surprisingly there’s a strong relationship between how people feel about their finances and the financial decisions they make and therefore how our property markets perform.
If you feel confident about your financial circumstances and the future of property, you are more likely to feel confident to make the big financial commitment of buying a new home or investing in property, and vice versa.
That’s one of the reasons I carefully track consumer confidence and report it here in this blog.
And the good news is that...
ANZ-Roy Morgan Consumer Confidence was up by 1.9% last week, building on the 0.3% gain in the previous week.
ANZ Senior Economist, Felicity Emmett, commented:
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“Confidence gained for the second straight week, and is now well above its long run average.
The federal government’s tax refunds for low- and middle-income earners look to be boosting sentiment, particularly in the case of the ‘time to buy a household item’ subindex.
RBA Governor Lowe’s statement that interest rates would remain low for an extended period is also likely to have helped support confidence, pushing equities to 12-year high.”
All the subindices rose except ‘current finances’.
- Current finances declined 0.9%, although this followed a 2.8% jump in the previous week. Future finances gained 1.2%.
- Economic conditions subindices were more encouraging, with current economic conditions up by 5.8% and future economic conditions flat.
- The ‘time to buy a major household item’ index gained 3.5% after losing 4.4% previously. The four-week moving average for inflation expectations was up 0.1ppt to 4.1%.