Consumer Confidence at a 3-Year High after Election

The recent election is good news for anyone associated with investment property in Perth. The index of consumer confidence published by the Westpac/Melbourne Institute rose 4.7% in September, reaching 110.6. This is the best number in thirty-three months.

The index also showed that 29.3% of consumers think banks are the best place to “invest” new savings, while real estate was just behind at 27.5%. Incidentally, “paying down debt” received its worst index number in six years.

Meanwhile, lending finance decreased in July by 5.4% for the first time in six months. This was on the heels of a 6.4% increase in June.

What the Numbers Mean for Investment Property in Perth

The period immediately after elections is usually one of higher consumer confidence. Whenever the result of an election appears etched in stone before the election even happens, the confidence raises early. A majority of Australians are confident that the change in government will help solidify the economy and that we will see increased consumer spending and business investments.

At this point, both unemployment and interest rates are at historically low levels. The dollar is rising, as is the share market. Australia is poised for prosperity.

But Will Rising Consumer Confidence Continue?

Our buyers agents report a lot of interest in investment property in the Perth real estate market. However, we have seen small spikes in confidence before, only to see them go back down a few months later. Weekly surveys conducted throughout the year by Roy Morgan show an upward trend, but it remains to be seen how many Australians take action.

If Australians embrace the positive aspects of the economy and start spending and investing again, we could see a huge upturn. For 2013, it is crucial that the new Government seizes their current momentum and builds upon it to affect positive changes in the economy.

Last year, 40% of people thought banks were a safer place to put their money than real estate, with only 20% preferring real estate for a 2-1 ratio. Now, more people trust real estate over banks.