Posted on Thursday, April 10th, 2014 in by Matt Garmony
The Westpac Melbourne Institute Index of Consumer Sentiment declined by 0.7% in March 2014 and has declined 10.9% from its November 2013 peak, being at its lowest level since May 2013. The Institute was of the opinion “the initial declines in December-January looked to be mainly the unwinding of the election related sentiment boost”, however they go on to state the “more recent falls though have had a very clear theme centring on a sharp loss of confidence in the economic outlook and escalating job-loss fears.” Concern around job security is very high with the Institute stating “the run of bad news from the motor vehicle industry, other manufacturers and Qantas has clearly rattled consumers”, with “more consumers expect unemployment to rise in the year ahead” and will “impact consumers financial decisions.”
The Reserve Bank of Australia (RBA) kept the cash rate at 2.5% at the 1 April 2014 meeting with the RBA Governor Glenn Stevens stating there is “likely to be a period of stability in interest rates”, with “credit growth was slowly picking up” and house prices had increased significantly (mainly in Sydney & Melbourne) in the past year, while the “unemployment rate had continued to edge higher.”
In Perth, the Real Estate Institute of Western Australia (REIWA) said the property market “had come of the boil reporting patchy sales in the March quarter with the median price only lifting slightly from $546,000 at the end of December to $550,000 to the end of March” with RP Data-Rismark reporting a median dwelling price fall of 0.6% for the March quarter. David Airey, REIWA president indicated the number of properties for sale had risen by 861 in a month to 10,067 trending back to the equilibrium of 12,000.
In the new home market, the ABS reported dwelling approvals in January 2014 increased by only 0.7 percent which could be signs of a slowing of the building market.
The licensed valuers at Garmony Property Consultants are of the opinion the Perth residential property market is levelling off with the possibility of a slight correction in the second half of 2014 or early 2015, particularly in the lower end of the residential property market.