Consumers are still optimistic about property despite signs of a property market downturn, a new survey has revealed.
According to the Westpac Melbourne Institute Index of Consumer Sentiment, the index tracking ‘time to buy a dwelling’ increased by 5.4% from 99.3 in February to 104.7 in March. This is now 3% above its level in September, however it is still 13.1% below its level of a year ago.
Notably, says Westpac’s chief economist Bill Evans, the state detail on ‘time to buy a dwelling’ shows buyer sentiment in NSW – the weakest state – is now 44% above its September low although it is still 19% below its level from a year ago.
“This stability is also indicated by the Westpac Melbourne Institute Index of House Price Expectations. The Index lifted by 9.8% in March to be 16.6% higher than its level in December although still 18.4% below its level from a year ago,” Evans said.
But despite signs that buyer sentiment may be stabilising in a broader sense, the Index showed there was a sharp deterioration in respondents’ views on real estate as a wise investment relative to December.
“The divergence between this index and views on real estate as an investment may reflect uncertainty around potential changes to taxation policy affecting negative gearing,” Evans said.