Housing sentiment rose across in states even before the re-election of the Coalition and key monetary policy changes came into the picture, according to Westpac.
Data showed that sentiment in New South Wales and Tasmania soared, while the response in Victoria, Queensland, the Australian Capital Territory, and the remaining states and territory was more subdued.
“Prices have continued to decline but at a slower pace. Turnover remains very low, but auction markets and listings are showing an improved tone,” Westpac said in its report.
Consumer sentiment on whether it is time to purchase has been tracking upwards for about a year. The Westpac report showed that sentiment might climb even higher thanks to recent regulatory changes.
The Australian Prudential Regulation Authority has put an end to a restriction that slows the flow of credit. Mortgages used to be stress tested for repayments at a 7% interest rate, but now, APRA will allow banks to set their own stress-test rate.
The Reserve Bank of Australia has also hinted it will cut cash rates to 1.25% at next week’s meeting.
Alongside the scrapped Labor tax reforms and the proposed introduction of the Coalition’s first-home buyer guarantee scheme, these developments in the sector have made some property experts rethink gloomy predictions.
“Needless to say, next month’s sentiment results, due out June 12 and surveyed in a week that is expected to see the RBA’s first 25 basis point rate move, will be of intense interest,” the bank said in the report.
Domain reported that real estate agents in Sydney and Melbourne had logged an increase in current market sentiment. However, the full effect might be observed after a few weeks.
