Two-thirds of consumers see higher house prices in a year's time: Westpac

Around 62% of consumers expect house prices to rise by this time next year, according to the latest Westpac-Melbourne Institute consumer house price index.

The index rose sharply in April to its highest level since July 2010.

It is also the first time since April 2011 that a clear outright majority of consumers expect house price gains.

A further 30% expect house prices to remain stable with just 8% expecting prices to decline – the lowest proportion since April 2010.

The index measures the net percentage of those expecting houses to rise versus those expecting them to fall.

Westpac called the shift from +26.7 in January to +53.9 in April "a substantial improvement".

"After an extended period of uncertainty, Australian consumers now look to be much more convinced that house prices are on the way up," says Westpac.

"All states recorded a rise in house price expectations ranging from a massive turnaround in Vic (+54 pts from –1 in Jan to+53 in April) to solid but more muted rises in SA (+11pts) and Queensland (+9pts) where price expectations are more downbeat.

"Consumers in WA and NSW have the most positive outlook for house prices – price growth has already been running at 5%+rates in both of these states over the last six months.

"Notably, April saw more WA consumers expecting house prices to rise than there were during the 2009-10 upswing," says Westpac.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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