Powered by MOMENTUM MEDIA
subscribe to our newsletter

Housing boom boosting consumer confidence

One analyst has claimed that “a very high correlation” exists between house prices and consumer sentiment.

Credit Suisse senior adviser Robert Parker said that if house prices are increasing at twice the rate of inflation per year, it actually has a very positive impact on consumer sentiment.

“If, however, you have a housing bubble like we had [in 2013] in Singapore and arguably still have in Hong Kong, as we did earlier in 2014 in London, that actually has a negative impact on consumer sentiment, because everyone is assuming the bubble is about to burst,” Mr Parker said.

“I don’t see that happening here in Australia,” he said.

However, while Australian property prices continue to rise well ahead of inflation, consumer confidence has fallen to its lowest point in more than three years, throwing Mr Parker’s theory into question.

Advertisement
Advertisement

PROMOTED CONTENT


The latest Westpac-Melbourne Institute Survey of Consumer Sentiment paints a bleak outlook for the economy for the next 12 months.

Westpac chief economist Bill Evans described the 5.7 per cent fall in the Consumer Sentiment Index, from 96.6 in November to 91.1 in December, as "a very disturbing result".

Housing boom boosting consumer confidence
mortgagebusiness

Latest News

Home ownership costs jumped by 130 per cent over two generations, with Gen X spending a quarter of their income servicing their loan, accord...

Fintech lender Tic:Toc has secured $25 billion of additional funding for the next seven years, after extending a partnership with Bendigo an...

The non-bank lender has closed its first RMBS deal under the Bluestone Prime program, worth $700 million. ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.