- Australians are expecting property prices to continue rising strongly, as consumer confidence soars.
- The Westpac Consumer Confidence Index hit its highest level since November 2013, helped by a strong rise in property sentiment.
- Despite the rebound in confidence in the economy and property market, a growing number of Australians expect the job market to keep deteriorating and anticipate more job losses.
- Visit Business Insider Australia’s homepage for more stories.
The pandemic appears to have reignited the great Australian obsession with the property market against all the odds.
Released on Wednesday, the Westpac Consumer Confidence Index posted “another strong result”, showing Australians are feeling overwhelmingly positive again about the economy.
“The most important developments since last month have been the significant unwinding of restrictions across Victoria and the reopening of the Victoria-NSW border,” Westpac chief economists Bill Evans said.
The index soared to 13% above its pre-pandemic six-month average, with Victorian confidence alone up 9%.
However, it’s on real estate that Australians feel particularly strong. On the question of whether now was “the time to buy a dwelling”, the index jumped 8% to 132, its highest point in seven years and a whopping 11% higher than it was in November last year.
On a state breakdown, Queensland surged more than 11% on the question of property, followed by New South Wales on a 9.4% jump and Victoria by more than 5%.
“Without doubt this survey is signalling a strong resurgence in the housing market,” Evans said.
“For now, the boost from record low interest rates is clearly overriding negatives around high unemployment, the overhang of deferred loans, the prospect of withdrawal of significant fiscal support, slow population growth and rising vacancy rates.”
All have no doubt helped lift price expectations to within 7.3% of March levels when prices were rising across the country, and well above their long term average. With sentiment driving the market, it comes on the back of prices rising nationally, and in every capital other than Melbourne.
It comes just one day after Australian businesses reported feel more positive than they did prior to the pandemic.
Curiously, resurging confidence in the property market and the economy flies in the fact of job fears.
A growing number of Australians expect unemployment to rise, as the employment index worsened by 6.2%. At the same time, hundreds of thousands of mortgage deferrals remain active and are due to expire in January.
Significantly, the index results were recorded prior to the news that Pfitzer had recorded a 90% effectiveness result for its vaccine, news that could see confidence grow more still.
After a constrained few months this year, property prices might have a way to bounce yet.