Consumers more optimistic about Australia’s housing markets in 2013

Consumers more optimistic about Australia’s housing markets in 2013

Last week Nine Rewards and RP Data undertook our second housing market sentiment survey.  The first survey was in October last year and we intend to run the survey every three months.  The results were stronger than I expected, in the sense that only a very small proportion of the survey respondents expected dwelling values to fall over the next six to twelve months.

The survey is administered by Nine Rewards, a company which is owned by the Nine Entertainment group and has a panel of more than 1.4 million survey participants, 1,040 of whom participated in the housing sentiment survey.   Nine Rewards have ensured the sample is representative of the population, including respondents from all states, across a range of age groups and property tenure types (own their home, paying off their home, renting etc).

The results showed that 38% of the survey respondents expected home values to rise over the coming six months, slightly higher than the 33% who thought values would rise back in October last year.  Just over half the respondents expected dwelling values to rise over the next twelve months, a decent jump from 42% back in October last year. 

The results reinforce the results from the Westpac-Melbourne Institute consumer sentiment survey which surged to its highest level since December 2010 last month.  Consumers are becoming more confident and more willing to make high commitment decisions.

Even though consumers are becoming increasingly confident about the Australian housing market, the magnitude of the growth expectations remains reasonably tame.  Of those respondents that thought home values would rise, about 80% of them are expecting values to rise by less than 5% over the next five years. 

There were some considerable differences in the responses from region to region and city to city.  Residents of the ACT and Perth have the most optimistic expectations for their local housing markets, with about 70% of respondents in these regions expecting home values to rise over the coming 12 months.  At the other end of spectrum are Tasmanian’s where only 30% of respondents expect values to rise over the coming year.

Across the regions

Growth expectations for housing markets in Brisbane and Melbourne remain relatively sedate, with less than 50% of respondents living in those cities expecting values to rise.

Respondents to the survey were also asked about where they expected rental rates to go from here over the next six and twelve months. A larger proportion of consumers are expecting rents to rise over the coming year, with 54% of those surveyed expecting higher rents over the next six months and 62% of respondents expecting higher rents over the next year. 

Overall, the results provide a fairly positive assessment of how consumers are viewing the housing market around Australia.  Look out for the next results in three months’ time.

About Tim Lawless

Tim heads up the RP Data research and analytics team, analysing real estate markets, demographics and economic trends across Australia

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5 Responses to Consumers more optimistic about Australia’s housing markets in 2013

  1. Duncan March 8, 2013 at 8:57 am #

    Do consumers consume houses? I think they should be asking investors.

    • Tim Lawless March 8, 2013 at 1:44 pm #

      Not sure if I get your question, but investors were included within the survey. One of the opening questions we asked the respondents was which statements apply to them from the list below (they could choose multiple statements):
      I don’t own a property but am looking to buy in the next 1-5 years (228)
      I currently own or paying off the mortgage on the home that I am living in (566)
      I currently own or paying the mortgage on at least one investment property (203)
      I am looking to invest in a property in the next 1-5 years (177)
      I am currently renting the property that I live in (218)

      Tim

  2. Fiona McEachran March 8, 2013 at 3:26 pm #

    I guess consumer opinion does play some part in the growth of values in Australia’s housing market, but really actions do speak louder than words.

    There is no denying that there are the conditions for housing values and prices to increase. The city auction clearance rates are a good indicator, as well as the fact that rents have been and are rising in many locations.

    It will be fascinating to compare again in 3 months and see if the positive assessment does eventuate.

  3. James April 4, 2013 at 7:05 pm #

    Hi, can someone please explain slide four? Do consumers expect home values in the ACT to rise by 70%? Surely that makes no sense, however it seems to suggest this. Rgs.

    • Tim Lawless April 4, 2013 at 8:44 pm #

      James, thanks for your observation – the chart was incorrectly labelled (fixed now…). The chart shows the proportion of survey respondents who expect dwelling values to rise over the coming twelve months. Thanks for your feedback… Tim

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