Consumer sentiment at record high
Homeowner sentiment is at its highest level since records began in 2007, according to research by Genworth.
The Genworth Homebuyer Confidence Index measures homeowner sentiment and has jumped from a record low of 93.4 in March 2013 to a record high of 100.1 this month.
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The 7.2 per cent spike in confidence was driven by a lower proportion of mortgage holders who expected to experience mortgage stress over the next 12 months, said Genworth chief commercial officer Bridget Sakr.
“Interest rates have come down ... I think that in itself has elevated the confidence of consumers, and they also feel that there will be further rate reductions in the next half of 2013,” Ms Sakr said.
“I think that’s primarily what’s driving the confidence level.”
Sentiment in Western Australia has seen the biggest change – the state had the highest sentiment in the March survey. However, it saw the lowest increase in July.
“This time round, WA had the lowest increase of 0.8 per cent, which is attributed to the pessimism of WA homeowners in relation to expectations of hardship,” Ms Sakr said, quoting that 60 per cent of those surveyed in WA were most concerned about job security, compared to a national average of 44 per cent. Ms Sakr believes high sentiment is a good sign for property investors, saying the effect on the market for investors will be in line with the positive effects on owner occupiers.