Australian Property News

Consumer confidence bodes well for property

Posted on Friday, January 11 2013 at 3:50 PM

Investors will be pleased to hear that despite some recent negative press, building approvals are business as usual and consumer confidence is up.

CommSec’s latest release shows dwelling approvals rose 2.9 per cent in November after a 5.1 per cent decline in October.

In conjunction, consumer confidence rose by 3.1 per cent to a 12-month high according to the Roy Stanley Consumer Confidence Rating.

The results indicate that despite some observers highlighting a negative market sentiment in the residential sector, the figures show activity is basically operating at normal levels.

The data also suggests that interest rate settings are at about the right level.

The trend is clear – Aussie consumers are gradually becoming more confident with emphasis on the word ‘gradual’, says the CommSec release.

Provided that the gloomy economic news stays away, we could expect consumers to become more upbeat, embracing a strong dollar, low unemployment, better housing affordability and cheap finance rate, notes the release.

In terms of building approvals, the 2.9 per cent rise retraces some of the decline in October and sets the annual level as up 13.2 per cent.

According to CommSec, the data suggests that interest rate settings are about right and the construction industry can look forward to a year of Goldilocks activity – not too hot, not too cold but just about right.