Westpac consumer sentiment declined by 3.5 per cent in January to sit back close to its long run average, though it remains 4.3 per cent higher than one year ago.
There was clearly a slowing in national housing market sentiment in the second half of 2015, but the ‘time to buy a dwelling’ index came surging back from 99.2 in December to 113.0 in January.
That is the highest reading for this index since May last year, to be now just 1.4 per cent below its level for January 2015 (when the Sydney boom market was in full swing).
Given the huge scale of the jump, Westpac noted: "We can only conclude that this print may be signalling improving optimism in the housing market."
Most of the improvement in the national index was driven by a sharp improvement in New South Wales.
The improvement in house price expectations jumped even more dramatically by 21.1 per cent in from 103.7 in December to 125.8 in January, this read representing the best result since September 2015.
The acid test for the Melbourne and Sydney markets will be when the auction markets crank up again in due course.