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A recent report by Roy Morgan Research has found that consumer confidence rose by 2.9 per cent last week, following a steady six-week drop to levels not seen since 2009.
Roy Morgan economist Justin Fabo said that although the news is a “tentative, positive sign”, the situation needed to be watched closely given the extent of the recent fall in consumer confidence.
The report also found a 3.1 per cent decline in people’s perception of their financial situation compared to a year ago. That indicator has now fallen 15 per cent since it peaked three months ago.
Australian Property Monitors chief economist Andrew Wilson said although confidence is often seen as a key driver in the housing market, the news is actually lagging behind recent upwards trends.
“I think in this case it’s a lagging indicator rather than a leading indicator,” he said.
“We’re seeing plenty of activity in the property market, and in fact the housing markets in Melbourne and Sydney have actually shifted up a gear in the last couple of weeks.”
Recent data from the Australian Bureau of Statistics showed a 6.8 per cent quarterly rise in residential housing construction, while the Housing Industry Association reported a steady four-month rise in new home sales in April.
However a report by RP Data this week showed that dwelling values across capital cities had dropped by 1.9 per cent in May, the first monthly fall in 12 months.
