A swing in confidence in the housing market is filtering through to on-the-ground brokers as Australians express more faith in the future of property.
MPA Top 100 Broker Warren Dworcan of Rate Detective Home Loans said he is seeing the impact of a return of consumer confidence, following the release of the AFR's Smart Investor Index which showed a 45% swing in property market confidence for the three months to March.
The marked turnaround erased a 35% downturn in the Index in the previous quarter.
“Probably the best sign of that is some of the preapproval applications we’ve had sitting on the sidelines where people are looking for property to purchase, they’re actually finding property that’s suited to them. Valuations are also coming up slightly higher than they were, which again is another indicator that some confidence is coming back,” Dworcan said.
Working in Osborne Park, WA, Dworcan said a better rental market in Perth is also providing a boost to his business.
“In Perth we’ve seen a drastic increase in the rental prices, and that brings investors back into the market in a big way because the yields are becoming more attractive,” he said.
The Smart Investor Index also saw a massive increase in confidence in the global economy. Australians’ view of the global economy skyrocketed 218% as concerns over Europe and the U.S. began to fade. Dworcan said Australians are becoming increasingly globally aware, and are sensitive to shocks coming from other economies around the world.
“When we see difficulties with overseas funding and a slowdown in developing countries, that affects our mining industry. I think the average Australian reads the newspaper and sees the clear issues going around the world, and they’ve become a little more cautious about how that affects us here,” Dworcan said.
Overall economic sentiment improved 22% for the quarter, with job security proving the only area in which Australians’ confidence has fallen. With sentiment on a whole heading up, Dworcan said brokers can see tangible benefits.
“When we see these confidence levels improving, it does bring results quite quickly and that’s very positive,” he said.