Consumer confidence soars

Australians-are-feeling-more-positive-about-buying-a-home-_157_6012839_0_14102946_300Between the Reserve Bank’s decision to cut the official cash rate down by 25 basis points and the release of the 2015-2016 federal budget, there has been a lot said in the real estate sector in the past few weeks. These two events also look to have given households across the country something to smile about, with a new survey showing that confidence has risen impressively off the back of low interest rates and the budget announcement.

The latest Westpac–Melbourne Institute Index of Consumer Sentiment has revealed a 6.4 per cent rise in confidence among Australian consumers during May. Chief Economist for Westpac Bill Evans highlighted that this is the highest result recorded since January last year.

“It is the first time since February this year that the index has been above 100, the point above which optimists outnumber pessimists,” Mr Evans said in a May 20 statement.

“Clearly, the two driving forces behind this boost have been the federal budget and the interest rate cut which the Reserve Bank delivered in the first week in May.”

In particular, the index showed an encouraging rise in the housing sector. According to the survey, the confidence among respondents who hold a mortgage increased by a solid 4.8 per cent over the period. As well, it showed that Australians are feeling more positive towards the prospect of buying a house. The portion of the index that indicates whether it is a good time to purchase residential real estate jumped by 5 per cent, likely boosted by the recent rate cut, Mr Evans Said.

This seems to be consistent with a recent study from research firm Roy Morgan. According to the figures, over 1.3 million Australians intend to buy or build property in the next year, with Sydney, Melbourne and Perth being the top three most in demand cities for real estate among house hunters.

With interest rates and a positive reaction to the federal budget acting as a buoy to the housing market across the country, it could be a good time for buyers to get in touch with their local real estate agent in order to pounce on the confident conditions.

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