The property market relies on a whole range of factors, from the wider economy to policy decision, but consumer confidence is a vital condition that affects how real estate in Adelaide performs. The Westpac Melbourne Institute Index of Consumer Sentiment rose by 8 per cent in February, revealing a surge in how confident consumers are feeling across the country.
A benefit of improving consumer confidence is increased spending, particularly for the first home buyer segment. Westpac's Chief Economist, Bill Evans, said the result was much better than expected with optimists edging out in front.
"It represents the first time since February last year that we have seen a majority (albeit miniscule) of optimists over pessimists. It is also the highest level of the Index since January last year," he said.
"This lift in confidence should allay any concerns that rate cuts, in the current environment of record low rates, can be a negative for confidence."
However, Mr Evans said falling interest rates was not the only reason behind the improved outlook, as lower petrol prices and a well-performing share market have also had an impact. He also noted that, as expected, rate cuts have buoyed confidence in the housing market. By monitoring views on the 'time to buy a dwelling' index, the report discovered that confidence has surged 9.7 per cent to its highest point since February 2014. The index showed a positive outlook for house price expectations, with confidence climbing 6.9 per cent.
This will likely play in Adelaide's favour. The Australian Bureau of Statistics revealed that Adelaide's property prices are far more moderate than other locations, with a rise of 2.5 per cent over the 12 months to December 2014, compared to Sydney's 12.5 per cent. While housing industry commentators fret over a potential bubble forming in New South Wales, buyers will find sweet relief in Adelaide's more moderate market and family-centric lifestyle.
If these announcements have convinced you that it's time to buy a property in Adelaide, contact your local estate agent.