Time to buy?? confidence across Australia via RPDATA – LJ Gilland Real Estate Pty Ltd

Time to buy home confidence up in NSW, Victoria and WA, but Queensland, SA and Tasmania still pessimistic: Tim Lawless

By Tim Lawless
Monday, 26 November 2012

The confidence level among Australian consumers (as measured by the Westpac-Melbourne Institute Consumer Sentiment Index) has been on an upwards trend since April this year, and over November the index recorded a sharp rise to reach the highest level since April 2011. An easy way to interpret the index is when the reading is over 100, optimists are outweighing pessimists, and when the index is lower than 100 pessimists are outweighing optimists. In November 2012, the Consumer Sentiment Index was showing a value of 104.3.

Click to enlarge

I have found measures of consumer confidence to be one of the most important indicators for the housing market, with the index showing an 85% correlation with the number of transactions in the housing market. To put it simply, when consumers are lacking in confidence, transaction volumes tend to be low, and when confidence is high, the number of home sales follows suit.

Click to enlarge

Confidence readings aren’t the same across all of the states. In fact, Queensland, South Australia and Tasmania are continuing to record index values below the 100 mark, although each of these states has recorded an improvement in the confidence reading. The most optimistic states are New South Wales, Victoria and Western Australia, where the index is now tracking higher than 100 (note the index is not available for the territories). Interestingly, the Confidence Index has moderated in Western Australia, most likely a response to a weaker resources sector, while New South Wales and Victoria are the primary drivers of improving confidence levels.

Click to enlarge

One of the subsets of the Consumer Sentiment Index is the "time to buy a dwelling index", which has shown a significant improvement nationally and across each of the states. The national index is now showing the highest reading since September 2009 and most of the state level indices are approaching their 2009 highs as well.

Click to enlarge

State-by-state breakdown follows

Click to enlarge

Click to enlarge

Click to enlarge

Click to enlarge

The indicators are further affirmation that the Australian housing market has moved out of the down phase of the cycle, and there is mounting evidence that conditions will continue to improve. Average selling time has shown an improvement, so has the level of vendor discounting, and auction clearance rates are holding firm above 50%. Additionally we have seen values on an improving trend since the beginning of June. Despite the October fall in the RP Data-Rismark Home Value Index, it is looking like the November reading will be another positive month for the capital city housing market, with values up 0.3% over the first 21 days of November.

Timis national research director of RP Data.

Best regards,

Linda J. & Carlos Debello, LJ Gilland Real Estate Pty Ltd

Tel: (07) 3263 6085 | Mobile: 0409 995 578 & 0400 833 800 http://www.ljgrealestate.com.au

Confidential Email:- The information in this message is intended for the recipient named on this email. If you are not that recipient, please do not read, copy, distribute or act upon the message as the information it contains may be privileged. If you have received this message in error, please notify us immediately by return email. Thank you for your co-operation.



Leave a comment

Filed under Uncategorized

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s