Specufester spirits lift as households sink

Via Martin North:

We have released our latest financial confidence index which is derived from our rolling 52,000 household surveys. The index moved a little higher since the election, reflecting some more positive vibes from property investors, at the margin, and from those holding property more generally.

It is all relative however, as the current read of 86.34 is up from April’s 85.9, but the overall measure is still in deeply negative territory.

Looking at the segments by wealth, there was a bounce in those with mortgages, and also those renting or living with family or friends – but again still in negative territory. Those with property, and no mortgage hardly reacted at all.

Analysis across our property segments shows a move up from property investors (now expecting no changes to capital gains and negative gearing), a slight improvement from owner occupied borrowers, and a kick up from those renting.

By states, the convergence of recent times continues, although NSW and VIC saw a slight improvement, while WA and QLD saw a deterioration (linked to higher default rates in these states).

Younger household scores fell again, but there was a bounce in those aged 40-50 and 50-60, directly linked to the slight change in property investment sentiment.

Within the moving parts, there was little movement in job security, with 36% still feeling less secure than a year ago. Public sector jobs look less secure now.

Savings remain under pressure, with lower rates on bank deposits, though higher returns from shares. The prospect of lower deposit rates took the “less comfortable” rating down 2.88% compared with the previous month.

Debt remains a concern, with 47% worried by the amount of credit they hold, while 49% are feeling about the same as a year ago, down 2.16% on the month before.

Income remains under pressure. Given the lack of real wages growth this should be of no surprise. 40% said they had seen no change in the past year, and 50.5% said, in real terms their income had fallen.

On the other hand, costs of living remain a challenge, with 91% saying costs have risen over the part year. Electricity, child care, health costs, rates, and food all registered, suggesting the CPI continues to understate the real experience of many households.

And finally, net wealth deteriorated for 46% of households compared with a year ago, thanks to falling property prices. 26% said there was no change and 24% higher ( down 1.63% on last month). Stock market performance helped to offset the property falls.

So the question becomes, will the slight tick-up in property related sentiment stick, or is the overall index set to fall further, as reality dawns – low income, rising costs, big mortgages, compressed returns on bank deposits, and weaker job prospects?

Put like that, the small falls in mortgage monthly repayments, and income uplifts for some may not be sufficient to support the index ahead. We will see.

Comments

  1. Yipppppeeee we are getting the hell out of here finally got the wife to realize how much easier it is to get ahead back in the US.. My family and I are moving back to the US in a few months. Good bye Australia. We got here in Dec 2018 and so glad we are not staying. Its so sad what Australia has become a freaking BIG FAT tax, on top some of the most unaffordable housing that is just ridiculous. Got a beautiful home in Nashville with 9 acres 30 miles from the city and is affordable. Its a shame what the govt has done to this place. We lived here Dec 01 – Aug 09 and just came back in Dec 2018 and let me tell you its not the same place. Nanny country is a freakin understatement and so much more. There is no future here for my 2 sons. When the s#$T hits the fan here and its coming we will be so glad we left. Even my accountant told me Australia is not a friendly place for small business anymore. A few more months is all I got to go. CANT WAIT. I have had so many people that I have met and know that told WHAT IN THE HELL DID YOU COME BACK HERE FOR. If I got paid a dollar for everytime I heard that Id have some serious money.

      • Yes sold my ass off to the wife it was hard and alot of blood sweat and tears with her as she really wanted to make it here in Australia.

    • Stone the Crows

      What in the hell did you come back here for ?

      Thirty miles out of Nashville will put you into some very nice rural surrounds, you will not have any regrets at all, just a bigger, brighter future with the option to be very self sufficient.

      All the best mate, Australia really does suck right now !

      • “What in the hell did you come back here for ?”
        It took me about 4 months to realize it. The straw that broke the camels back was when my accountant took my income from last year in the US and told me I would pay about 41% in tax plus super plus medicare levy 2% tax. that was my F#$K AUSTRALIA.

        Yeah look up the suburb Nolensville, TN thats where our house is 9 acres in the country and the School system it is in is ranked in the top 10 best school systems in the US. Thanks for your wishes.

    • HadronCollision

      I’m now scouting around Geneva, Lausanne, Basel, Hawaii for eHealth jobs. Will expand to US – looking for something closeish to ski fields or an airport to get to them. (Feel free to suggest away).

      We have no connection to USA, so I guess EB-1 or 2

      • Good for you LBS, i left Aus back in 1999, moved to Tokyo Sing and now HK…love Asia, i do Luv Aus but it aint the place i knew, everyone now just keeping up with one another like its some contest of who owns what and the most, all about money, papers and free to air keep people Dumb while the country gets taken over by micro managers placing more restrictions and forcing PC on everyone….Anywayzzz, you got the balls to realize life is too short and procrastination is a thief of time. Hope you’ll keep up on the MB blogs…! .

      • No offence Rob, I like Asia as well, but your comment “, everyone now just keeping up with one another like its some contest of who owns what and the most, all about money, “, and you don’t think that applies to Asia??

      • boolstrood I am not going anywhere near NY or California….. no thanks. Tennessee is my home SCREW ALL THAT DEMOCRAT LIBERAL SHIT.