Confidence – or the lack of it – has been roundly credited with determining the outcome of the spring selling season for 2012, which officially starts on Saturday.
Craig McKenzie, executive general manager of analyst RP Data, told Australian Broker Online a lack of buyer confidence would hamper activity.
“Until such time as there is a sustained recovery in the consumer mindset it seems unlikely there will be a vast improvement in sales activity,” he said.
The Housing Industry Association’s chief economist Harley Dale also believes confidence issues are a serious concern, particularly for new housing.
“The consistently weak consumer confidence is weighing very heavily on new housing investment, far more so than is the case for retail expenditure,” he said.
“Combine that low confidence with very tight credit conditions and excessive taxation, and you have the unpalatable recipe for the recessionary conditions facing new housing.”
“Leading indicators suggest this situation will persist well into 2012/13,” he said.
However, strong auction clearance rates in Sydney and Melbourne last weekend were attributed to the lower end of the market, spelling potential trouble for wealthier suburbs.
Loan Market’s CEO Sam White confirmed to Australian Broker Online that activity was “subdued” at the top end.
There is, however, “momentum in line with recent stock market confidence,” he said.