Business Insider’s David Scutt going all doe-eyed for house prices today:
Australians, collectively, think now is the best time to buy a home in over three years, encouraged by lower prices, especially in Sydney and Melbourne.
The ‘time to buy a dwelling’ index in the Westpac-MI Australian Consumer Sentiment report surged by 11.8% in November, leaving the index up a mammoth 16.7% on the level of a year earlier.
It now sits at the highest level since March 2015, led by a sharp increase in sentiment among those respondents in New South Wales, where home prices have fallen the fastest over the past 12 months.
“Consumers in New South Wales showed a particularly strong gain with a 26% jump taking the state index to a five-year high,” said Bill Evans, Chief Economist at Westpac.
What Mr Scutt does not mention is that the “time to buy” index is inversely correlated with prices:
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In a very real sense, the better the “time to buy” index gets the worse the state of the market.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
