PRD → Real Estate News → Just Released - Q2 2019 Key Market Indicators

Just Released - Q2 2019 Key Market Indicators

May 21 2019

Uncertain Times Impact Consumer Sentiment And First Home Buyers

Australian consumer sentiment read 100.7 index points in April 2019, exactly on the positive line of 100 index points, indicating that in general, Australians have a positive yet cautious outlook on the economy. This is interesting as the current consumer sentiment is on a -1.7% decline compared to 12 months ago (April 2018), which does not come as a surprise given past events such as: the Royal Banking Commission’s enquiry into the banking and financial sector, the handing down of the Federal Budget 2019, and the announcement of the 18 May 2019 Federal elections. That said, the current positive outlook is welcomed as it suggests Australians have a higher propensity to spend, thus keeping the Australian commercial market alive.

First home buyer activity declined by -5.8% over the past 12 months (to December 2018). This may come as a surprise, as the Australian Home Loan Affordability Index increased by 1.3% during the same time frame. However, other factors have caused first home buyer activity to slow, such as: tighter home mortgage requirements, a slowing down in capital city market price growth, and uncertainty in political stability and any other taxation policies that may impact disposable income. There is still good news on the horizon, as first home buyer activity has increased in New South Wales by 2.6% and in Victoria by 1.0%.

Dwelling approvals have declined Australia-wide by -21.7% over the past 12 months (to February 2019), which allows for currently constructed, or in construction stock, to be absorbed. The chances of this happening are high, as Australia’s unemployment rate declined by -9.1% over the past 12 months (to March 2019), indicating that there are more people in the workforce. Furthermore, weekly family median income increased by 2.6% over the past 12 months (to December 2018). These factors combined, point to a society that should have a higher number of people with disposable income, and potentially a higher dollar amount of disposable income.

Overall, there are strong economic fundamentals presently in play. It will be interesting to see how the flow on effects from the Federal Election 2019 results will impact consumer sentiment and first home buyers in Q3 of 2019 and beyond.

The ‘PRD Q2 2019 Key Market Indicators’ provide a quick snapshot of the current state of the market in Australia from both an economic and property perspective. The Indicators cover both national and state level data, comprising of: