Last week Nine Rewards and RP Data undertook our second housing market sentiment survey. The first survey was in October last year and we intend to run the survey every three months.
The results were stronger than I expected, in the sense that only a very small proportion of the survey respondents expected dwelling values to fall over the next six to twelve months.
The survey is administered by Nine Rewards, a company which is owned by the Nine Entertainment group and has a panel of more than 1.4 million survey participants, 1,040 of whom participated in the housing sentiment survey. Nine Rewards have ensured the sample is representative of the population, including respondents from all states, across a range of age groups and property tenure types (own their home, paying off their home, renting etc).
The results showed that 38% of the survey respondents expected home values to rise over the coming six months, slightly higher than the 33% who thought values would rise back in October last year.
Just over half the respondents expected dwelling values to rise over the next twelve months, a decent jump from 42% back in October last year.
The results reinforce the results from the Westpac- Melbourne Institute consumer sentiment survey which surged to its highest level since December 2010 last month. Consumers are becoming more confident and more willing to make high commitment decisions.
Even though consumers are becoming increasingly confident about the Australian housing market, the magnitude of the growth expectations remains reasonably tame.
Of those respondents that thought home values would rise, about 80% of them are expecting values to rise by less than 5% over the next five years.
There were some considerable differences in the responses from region to region and city to city.
Residents of the ACT and Perth have the most optimistic expectations for their local housing markets, with about 70% of respondents in these regions expecting home values to rise over the coming 12 months.
At the other end of spectrum are Tasmanians where only 30% of respondents expect values to rise over the coming year.
Growth expectations for housing markets in Brisbane and Melbourne remain relatively sedate, with less than 50% of respondents living in those cities expecting values to rise.
Respondents to the survey were also asked about where they expected rental rates to go from here over the next six and twelve months.
A larger proportion of consumers are expecting rents to rise over the coming year, with 54% of those surveyed expecting higher rents over the next six months and 62% of respondents expecting higher rents over the next year.
Overall, the results provide a fairly positive assessment of how consumers are viewing the housing market around Australia. Look out for the next results in three months’ time.