Ensure you never miss an issue of the
real estate business bulletin
Inevitable rate rises drive fall in confidence

Inevitable rate rises drive fall in confidence

by Staff Reporter 0 comments

Consumers are lacking confidence as they wait for interest rates to rise, research has shown.

Consumer sentiment fell by three per cent in February, down 7.5 per cent on the same time last year and 9.5 per cent below recent post-election peaks, according to the Westpac-Melbourne Institute Index of Consumer Sentiment.

Westpac chief economist Bill Evans said the survey shows households are particularly worried about the future, with interest rates a major concern.

“Households are clearly more worried about interest rates... In this survey, 57 per cent of respondents expect interest rates to rise over the next 12 months, with 18 per cent expecting increases of more than one percentage point,” he said.

“That contrasts with only six per cent who expect some mortgage relief. When we last surveyed this issue in August last year, only 39 per cent expected rates to rise,” added Mr Evans.

The survey also shows that exuberance around house price growth is starting to wane, with the House Price Expectations Index falling by 2.2 per cent during the month.

While the index is now 4.3 per cent below its peak in December, it remains 26.2 per cent above its level at the start of last year.

Mr Evans said the survey is sending a clear message from households questioning why fiscal policy is about to be tightened and interest rates lifted when the labour market is so weak and housing affordability is being squeezed.

“There may also be heightened concerns about what lies ahead with the May Budget,” Mr Evans said.

Inevitable rate rises drive fall in confidence
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

The REB Top 100 Agents ranking is the foremost ranking of agents in Australia. It has set the bar for excellence in Australian real estate. To be ranked as an REB Top 100 Agent is the standard real estate professionals strive for. See the full 2018 ranking here!

featured podcast

featured podcast
An industry where the resilient succeeds

Tim Heavyside believes that a strong support team and good foundations are paramount to success in the real estate industry, and with regu...

View all podcasts

Would you consider working for Purplebricks or a similar 'DIY' model?

Yes (7.2%)
No (80.9%)
Perhaps - make me an offer (12%)

Total votes: 209
The voting for this poll has ended on: July 13, 2018
Do you have an industry update?