Prior to Federal Budget, Consumers Upbeat about Property Market
By Peter Sarmas on 2 Jun 2013
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Results from the third RP Data-Nine Rewards consumer sentiment survey in May revealed that consumer attitudes are more positive than negative when it comes to Australia’s current housing market.
The survey, titled ‘Consumer housing market sentiment survey’ incorporated responses from around 1,030 participants across Australia and asked a range of questions on what respondents expected from the property market over the next six to twelve months.
“The headline findings showed that housing market sentiment was substantially higher than what it was six months ago, but virtually unchanged from earlier in the year,” said Tim Lawless, RP Data national research director.
When asked whether respondents believed home values would rise over the next 12 months, 50 per cent of respondents agreed, while 41 per cent forecasted values to rise in the next six months. The Northern Territory market was the most optimistic, with 60 per cent of respondents anticipating property values to grow in Darwin over the next six months; while in Melbourne, 46.1 per cent of respondents expected prices to climb by the end of the year.
In addition, 80 per cent of survey respondents believe now is a good time to purchase a property – a leap of 4 per cent from when the inaugural survey was conducted in October 2012.
One of the biggest jumps in consumer sentiment appeared when respondents were asked if now is a good time to sell their home. Thirty-seven per cent of those surveyed agreed that now is a good time to sell, compared to 29 per cent last October. “As consumer confidence in housing market conditions rises, we are likely to see a large number of dwelling sales as the year progresses,” added Mr Lawless.
The survey also addressed hurdles that buyers consider when deciding to purchase a property. Forty-eight per cent of respondents believed their ‘personal financial situation’ is the most important factor. This was followed by ‘prospects for capital growth’ (21.9 per cent) and ‘interest rates’ (13.4 per cent). Interestingly, less than 10 per cent of survey respondents identified ‘job security’ as the most important factor when deciding to purchase a home.
Rounding up the survey were topics on the rental market. According to the survey, 61 per cent of respondents expected rental rates to increase over the next 12 months, and over 71 per cent of those surveyed forecast a rental rise of 2.5 per cent or more.
“It’s worthwhile noting that the survey responses were collected prior to the federal budget announcement,” said Mr Lawless. “Based on the Westpac-Melbourne Institute Consumer Sentiment Survey, which showed a sharp decline in May, it is reasonable to assume the improved confidence readings in the RP Data -Nine Rewards survey may have been dented post budget announcement.”
