Wednesday 25 October 2023

House price expectations continue to rise

Red Book of truth reveals all

Consumer sentiment remained mired at very low levels in October, according to Westpac's 'red book', despite a small lift in the reading from 79.7 to 82.0.

Spending has held up, to some extent, as households run down their financial buffers, but a contraction in spending is expected ahead. 

House price expectations continued their relentless rise, however, as they have all year. 

The house price expectations index increased +7.4 per cent over the past three months to a new cycle high.


Source: Westpac: Red Book

All of the most populated states have house price expectations in positive territory, with Western Australia and Queensland now leading the way. 


Source: Westpac, Red Book

Looking further out, economists see confidence growth among the industry rising to 2-year highs.


This reflects record high population growth, with immigration already topping 500,000 this year, and housing supply not keeping pace. 

This week's developer insolvency was NPM Group, a building group with 45,000 projects completed, and this follows on from Dome Group last week.

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Container freight costs have now fallen by more than 90 per cent since their 2021 peak.


Let's hope this translates into lower inflation ahead too.