Housing sentiment stable but markets still weakening: Matthew Hassan
EXPERT OBSERVER
Australia’s housing market has continued to weaken. Conditions still vary widely across cities but are soft overall, with price corrections underway in the previously strong Sydney and Melbourne markets and Perth's longer running period of price declines also continuing.
The three months to August have seen the Westpac Housing Consumer Sentiment Index (a composite measure based on four housing–related components of the Westpac Consumer Sentiment survey) soften a touch but remain consistent with stabilising demand. The main driver of the lift continues to be less downbeat reads on ‘time to buy’, partly reflecting an improvement in affordability. Small positives around jobs and risk aversion have been offset by weakening price expectations.
Turnover remains very low. Whereas earlier estimates had suggested activity might have been stabilising in the first half of 2018, revised and updated data now show turnover nationally down 6.2% over the year to July. The annual pace of decline has moderated and the most recent monthly figures hint at stabilisation but, without a revival, annual growth is likely to stay negative through to year end.
The continued decline in turnover suggests other factors such as tightening loan criteria and falling investor activity are weighing on activity, essentially preventing what would likely have been a stabilisation in conditions by now.
