Australian Consumers More Optimistic about Housing and Economy
The Australian consumer sentiment index rises to 9.3 percent in July. This is the second straight month of surge reaching its best level in 19 months. Aside from the more upbeat outlook into economic recovery, housing loans are also on the rise.
The positive mood reflects in data released by the government on Wednesday that shows an increase for the eight straight month. Record low interest rates and government handouts are drawing more first-time home buyers to the real estate market.
These two indicators should bolster the Reserve Bank of Australia’s (RBA) view that the Australian economy may recover later this year.
Of the 1,200 people surveyed by the Westpac Bank and the Melbourne institute, consumer sentiment has risen to 9.3 percent – the highest reading since December 2007. This comes as a surprise to analysts who expected a decline after the steep 12.7 jump in the previous month.
With the recent increase, the index is now up 23.2 percent in two months – the highest climb since the survey began in 1975. The measure of economic conditions over the next 12 months increased by 19.6 percent. Meanwhile, the outlook for the next five years rose 15.7 percent.
On the housing side, data showed that the number of home loans incrased by 2.2 percent in May. This is better than what was originally expected by economists given data from a month prior. Government grants boosted the share of loans to first home buyers to a record 29.5 percent while construction finance rose to its highest level since January 2002.