Good news for Australian property, but we’re too gloomy to enjoy it

Well, there is good news, but apparently, we’re still too gloomy to enjoy it.

The official stats show a healthy economy; housing sentiment is up and property, according to CommSec, is back in favour.  Overall, Aussie consumers are more optimistic.

But a mindset of misery lingers, and we aren’t quite willing to let go of it.

The Westpac/Melbourne Institute index of consumer sentiment rose, albeit minimally, by 0.3% in June, though remains down almost 6% on a year ago.

Banks were nominated as the best place to stash your cash by 33% of consumers, but the next best, and the biggest mover, was real estate – one-quarter of respondents (up from 18%) consider it the wisest place to put savings.

The jump in sentiment is, as CommSec economist Craig James reports, good news for our beleaguered housing market.

Sales are starting to lift, but consumers really need to follow through.  Why are we so reticent?

Perhaps our collective outlook is a backlash from the incessant negativity of politics or the chatter of an imploding Europe.

Or perhaps we need a bit of a shake up and an attitude adjustment that melds with the reality of a changing world.

Jog and live longer

I always read these too, don’t you?  Spotted in the Fin Review – a heart study in Copenhagen has found that slow and steady really does win the race.

To be a winner, you have to jog slowly, moderately if you must, and regularly – 60 to 150 minutes max per week, over two or three sessions.

The study of 20,000 participants started in 1976 and has found that regular joggers will improve their longevity by 6.2 years for men and 5.6 years for women.   Apparently this helps with happiness and wellbeing too.  I’m on it!

Poll

Last week’s MatusikPulse poll asked:  What you think is likely to influence the market over the next 12 months.  Here’s how you responded:

Media:  23%

Federal election:  22%

World economic outlook:  19%

Interest rates/finance availability:  15%

Local economy:  10%

Property valuations:  7%

Amount of resale stock for sale:  4%

So, how’s that for irony?  The tangibles – our local economy, property valuations, stock on the market, and even interest rates and availability of finance are perceived to have little influence on the market.

Yet the media and the seemingly interminable wait for a federal election do.  That says a lot about the influence of negative reporting in my book.  Though in terms of the federal election, just bring it on – puhleeze!

As to world economic outlook, let’s look at it this way: the economies of Greece, Ireland and Spain combined are less than that of Florida.  The perception that the world will come tumbling down, and us with it, due to strife in Greece or Spain, for example, has more to do with the desperate search for a headline than anything else.

Interest rates are an issue, and finance is harder to get.  But really, we may just have to get over our obsession with every little percentage movement – if you are not financially sound enough to get a loan at, say, 7%, you’re not going to get one at 6% either.

But guess what?  The forecast for Australia’s growth next year is 3.4% (up from 3% this year); Britain 1.7%, Japan 1.5%, U.S. 2.3%, and Europe 0.7%.  The growth projections are less than seen in the past, but still growth never-the-less – and we’re on top of the heap.

Confidence is what is needed.

This week’s poll question asks your opinion on what will have the greatest impact on new housing affordability.  Please take just a few seconds to give us your answer.  Results next Saturday.

Michael Matusik is the director of independent property advisory Matusik Property Insights. Michael is a 25-year veteran in the industry and his firm has helped over 550 new residential developments come to fruition. Michael has launched a new initiative, called Think Matusik. Think Matusik brings together expert opinion and select property opportunities.