How is property market confidence faring?
Property market confidence has been on something of a rollercoaster ride over the past few months, and as 2015 draws to a close, this trend shows no sign of abating. Various indicators have been released throughout the year, each shedding some light on how people perceive property and the economy as a whole.
Here’s a look at some of the leading indices and how they’ve assessed consumer confidence over recent weeks. Their insights could have an impact on how the market fares early in 2016.
Confidence turns a corner
The latest ANZ-Roy Morgan Australian Consumer Confidence Index suggests sentiment may have started to turn as the year draws to a close. A pickup was seen after Malcolm Turnbull was elected back in September, but much of this gain has now been reversed.
The index registered a reading of 112.8 in the week to 1 December, marking a fall of 1.5 per cent. As a result, the cumulative decline over the past three weeks now stands at 3.3 per cent.
Some of the most useful sub-indices in relation to the property market are people’s views towards their finances. After all, if people are confident in their own financial situation, they’re more likely to make a big ticket purchase such as real estate.
Sentiment may have started to turn as the year draws to a close.
Consumers’ views towards their personal finances have fallen for the past three weeks. There has also been a decline in how people think their finances fare compared to 12 months ago.
There’s still some way to go before the positive results seen back in September are replicated. Moving into 2016, Australians will be looking for something to restore their confidence to its former highs.
Assessing the property market
Meanwhile, the ANZ/Property Council Survey shows people’s opinions of the property market have also been affected, with potential ramifications for real estate in Sydney and Melbourne. That’s because respondents in most states – including New South Wales and Victoria – are now less optimistic than they were a year ago.
The report’s authors nevertheless believe there is some room for optimism, not least in light of the success of the construction sector. Low interest rates and high demand are having a positive impact on the building industry, and there’s every possibility this will continue into 2016.
ANZ also believes demand for real estate in Australia will start to slide, which could ultimately work in buyers’ favour. If price correction starts to take place throughout the nation, then it could entice more people to speak to a mortgage broker about making their first steps onto the ladder.
There could also be less demand from overseas investors towards the middle of next year, the bank forecasts, theoretically making it easier to secure a top quality property.
Looking to the future
Macquarie Bank believes property prices will start to fall in March next year, which some experts have been quick to disagree with. Among them was Louis Christopher from SQM Research, who told the Property Observer on 26 October that price growth is likely to be sustained, albeit at a slower pace than in previous years.
There have been no shortage of predictions about what might happen for the real estate sector in 2016. The RDC CoreLogic RP Data Australian Residential Development Outlook Spring Edition is among them, which suggests “solid activity” can be expected over the next 12 months.
Whatever the market has in store for confidence throughout 2016, you can rest assured that Ray White’s real estate agents are on hand to help with your property purchases. Our trusted brand has been at the forefront of the industry for many years, and 2016 will be no exception.