Fewer expecting house prices to rise, but more keen to buy: Westpac Melbourne Institute

The Westpac Melbourne Institute House Price Expectations Index has recorded fragmented confidence around housing, according to Westpac chief economist Bill Evans.

The “whether now is good time to buy a dwelling” index increased by 2.3%, despite remaining 12.4% below its level one year ago and 18.5% below its level two years ago.

“The change in the index over the last year has varied markedly across states. In NSW the index has been steady whereas it has fallen by 27% in Victoria and 17% in Queensland,” said Evans.

Meanwhile, the House Price Expectations Index fell by 11.2% in October, now 12.8% below its level of a year ago.

“We are seeing some caution emerge around the outlook for house prices,” said Evans.

The proportion of those expecting house prices to rise took a sharp drop from 66% to 53.8%.

Overall, the Westpac Melbourne Institute Index of Consumer Sentiment increased by 0.9% to October, at 94.8.

“This is the eighth consecutive month that the index has printed below 100, indicating that pessimists have outnumbered optimists for eight consecutive months. That had followed sixteen months where the index had registered above 100 on all but one occasion,” said Evans.

“The current reading for the index is 1.2% below the average for those eight months indicating that while the index seems to be “stuck” in a pessimistic range there is no sign, at this stage, of ongoing deterioration.”