Powered by MOMENTUM MEDIA
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.

Advertisement
Advertisement

“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.

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

The newly instated BOQ CEO has committed to revamping the bank’s home lending business amid a “disappointing” FY19 result. ...

The chairman and CEO of a non-major bank has called for an end to political “point scoring” at the expense of Australia’s banking syst...

The value of home loans taken out by investors has increased 11.6 per cent in the three months ending August 2019, according to a CoreLogic ...

FROM THE WEB
podcast

LATEST PODCAST: Mortgage pricing and product switching

Do you think the mortgage market will see more consolidation this year?

Website Notifications

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