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Consumer confidence jumps and that’s good for property

Consumer confidence rose last week, driven by a positive response to the federal budget.

Confidence surged 3.6 per cent last week to its highest level since November, after a 1.7 jump the previous week, ANZ/Roy Morgan’s consumer confidence index shows.

ANZ-RM-consumer-sentiment-index

Consumer confidence is a significant driver of our property markets

When people feel more confident about their jobs, their future and their wealth, they make significant purchasing decisions including buying a new home or investment properties.

Rising consumer confidence, as well as low interest rates plus the weekly reports of rising property values is surely going to put further impetus under our property markets.

Commenting on the latest survey ANZ chief economist Warren Hogan said:

“The initial positive reaction of Australians to last week’s budget is great news for the economic outlook,

This suggests to us that Australians believe the government has got the mix of medium-term fiscal consolidation and short-term support for the economy about right.”



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Michael is a director of Metropole Property Strategists who create wealth for their clients 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 jumps and that’s good for property' have 2 comments

  1. Avatar for Property Update

    May 20, 2015 @ 8:55 pm George

    Would be more informative to add property increases/decreases to the same graph. However from my recollection there seems to be little if any correlation between confidence and property prices even though you’d think so. For example: From July 2012 to April 2013 property was in the doldrums yet confidence took a huge lift up. Then in April 2013 just as property started taking off we see that confidence crashes. So a perfectly inverse relationship up until August/September 2013. Since then property has moved up steadily and strongly yet confidence has trended down on the whole. So my observation is that it would be the opposite of what this article leads us to believe and so property prices may be about to stall or stabilise as many people expect.

    Reply

    • Avatar for Property Update

      May 20, 2015 @ 10:13 pm Michael Yardney

      George

      In fact RPData/Corelogic have provided some detailed analysis that increased consumer confidence leads to increased property sales and then (with a lag) increased property values. And this makes sense

      Reply


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