The number of Australians who believe it’s a good time to buy a home surged 11.5 per cent over the December quarter, reaching highs not seen in three years.
CommSec chief economist Craig James says the Westpac/Melbourne Institute’s latest index shows more people are keen to park their money in bricks and mortar.
“Real estate was regarded as the second wisest place to put new savings, with that reading just below seven-year highs,” James says.
Housing finance commitments slid slightly by 0.2 per cent in October, new data shows, but total home lending for the year is up four per cent. Loans for land blocks rose by 17.5 per cent over 2012, which is the strongest pace of growth in three years.
“All the pointers suggest there are better times ahead for the housing market, representing good news for builders, tradespeople, material suppliers and a raft of retailers.”
On the wider economy, James says there’s good momentum moving into the New Year. In particular, forecasts for the resources sector show Australia is set to “reap extraordinary earnings” over the coming year. James says the outlook is far brighter than the “doom and gloom school would have you believe”.
Export volumes are predicted to increase substantially and the reason for a forecast drop in export values is due to the drop in commodities prices. While general consumer sentiment fell by 0.2 points to 100 on the index, loans to buy new or used cars hit a record 1.23 billion in October.
James says the drop is disappointing at first glance but digging deeper shows “sharp divisions across the country” are to blame. “In short, conditions are very mixed and how you feel depends on where you live and your housing status,” he says.
He believes the data suggests the Reserve Bank may opt to stay on the interest rate sidelines in the early part of 2013, preferring to see how the economy responds to rate cuts.
Source: Australian Property Investor