A new report by Westpac shows that confidence in the property market has reached its highest point in over a year – fuelled by low interest rates and the belief that prices will improve next year.
According to the Westpac-Melbourne Institute Index of Consumer Sentiment for October, the percentage of Australians who think it’s ‘time to buy a dwelling” has gone up by 10.6 per cent, the highest level it’s been since September 2019.
Western Australians and South Australians were among the most optimistic states, at 29 per cent and 10 per cent respectively, which is quite a standout considering their performance normally lags behind the eastern states.
Their level of confidence could be attributed to each of the state’s level of success with the virus.
However the eastern states were very confident about the future of the market too, even in Victoria where there are still strict restrictions in place, which hints at the expectation that their market is about to reopen.
There was an outstanding 11.3 per cent rise in confidence in NSW, compared with 7 per cent in Victoria, and 4.4 per cent in Queensland.
House price expectations also went up sharply, up by 31.5 per cent across the country, with all states registering ‘impressive recoveries’ according to the report.
Westpac chief economist Bill Evans noted that the national Index is now ‘only’ 17% below its pre-pandemic level and back around the level seen in July last year.
“There is clear optimism in smaller states – where housing has underperformed the major eastern states for several years – although the apparent resilience of the Victorian market is impressive,” he said.
Mr Evans also explained that the one of the likely factors leading to the surge in sentiment this month is the expectation that the Reserve Bank is set to cut the overnight cash rate from 0.25 per cent to 0.10 per cent at its next meeting on November 3.