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

A consultation has opened on extending BEAR obligations to all APRA-regulated entities, including insurers and superannuation entities, und...

The non-major has announced the appointment of a new CIO, just a day after appointing a new chair. ...

The non-major bank has appointed a new chief executive officer of HSBC Bank Australia Ltd, taking over from interim chief executive officer ...

FROM THE WEB
podcast

LATEST PODCAST: New government loans and grants for SMEs

Do you think Australia will move to quantitative easing this year?

Website Notifications

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