Consumer confidence, that rather intangible but nevertheless important component of the property market, is showing signs of serious improvement.
And the area in which consumer sentiment has improved the most is with the outlook for property prices.
It’s the latest in a series of indicators showing evidence of recovery in the major markets which have been struggling since the beginning of last year.
The Westpac-Melbourne Institute Consumer Confidence Index lifted 9.4% in April, with confidence across mortgage holders growing by even more, at 12.2%.
This means we have the highest level of consumer confidence since June 2022.
There was a particularly strong increase in optimism levels around property prices.
The outlook for property values grew 17% to remain only slightly below the level of April 2022 – which was just before the RBA started its cycle of lifting the official interest rate.
Indeed, Westpac chief economist Bill Evans commented that confidence in the outlook for house prices has boomed.
He said: “The index has increased by a remarkable 43% since its recent low in November last year.”
Across the states, confidence in the outlook for property prices lifted in Western Australia by 36%, Queensland by 30%, New South Wales by 16% and Victoria by 9.5%.
This rise in consumer confidence, as depicted by the Westpac Index, is perhaps also reflected in the latest data on dwelling prices.
All the major sources – including Domain, PropTrack, SQM Research and CoreLogic – are charting price increases in many of the nation’s major markets.
The price index published by CoreLogic on 1 April claimed house prices rose in March in 8 of the 15 major market jurisdictions and unit prices rose in 9 of the 15 jurisdictions.
(The 15 jurisdictions are 8 capital cities and 7 state regional markets).
The generalised national situation, according to CoreLogic, was a 0.6% increase in house prices in March – and a 0.6% increase in unit prices.
What this shows – yet again – is that Australian consumers have a different view of our property markets to the nation’s economists and journalists.
Economists and media generally keep telling us that prices will crash and consumers keep reacting with: “We don’t believe you. We’ve heard it all before and we think you’re wrong.”
And the price data from multiple sources indicates that the economists and the media have got it wrong, yet again, and the consumers of Australia are fundamentally correct.