Consumer confidence has joined business confidence on a strong upswing and is now at its highest level for 17 months. The housing surge also continued in April, but not at the same hectic pace as in March.

This was the strongest rise in consumer confidence in 22 years as the effects of the budget, stimulus packages, better growth figures for the March quarter and a stronger stockmarket overrode concerns about job security.

News of the jump in consumer sentiment followed reports yesterday from the National Australia Bank of a strong rise in business confidence (but not actual trading conditions), and a slowing in the slump in job ads measured in the ANZ Bank’s job ads survey.

Put a fork in them, the election is almost done.

Understand what happens next with our best ever discounts.


The ANZ’s job ads series for May fell 0.2%, the lowest fall for months and the NAB said business confidence rose 12 index points in May to minus-2 index points, the highest level since February of last year.

The rise in the Westpac-Melbourne Institute index of consumer sentiment was very similar: up 12.7 per cent to 100.1 points, seasonally adjusted, from 88.8 points in May.

The index rose above 100 point level for the first time in 17 months, the point that divides optimists and pessimists. The Roy Morgan survey of consumer confidence is also showing a positive reading now as well.

The survey showed that of the five components in the confidence index four rose; with expectations for economic conditions over the next five years jumping a sharp 20.2%; and assessments of family finances up 11.1%. But a measure of whether now is the time to buy major household items slipped 1.6%.

Westpac chief economist Bill Evans said in a statement accompanying the figures that the result was “truly remarkable”.

“It is the second largest recorded increase in the index since the survey began in 1974 and the largest increase in the last 22 years,” he said. “It is very likely that the dominant factor behind this extraordinary rise was the release of the March quarter national accounts last Wednesday.”

Meanwhile, the Australian Bureau of Statistics has reported that first home buyers continue to dominate housing finance figures.

Housing finance commitments for owner-occupied housing rose 0.9% in April, seasonally adjusted, to 63,395, and the total housing finance by value rose by 3.6% in April, seasonally adjusted, to $21.5 billion.

The market had expected the number of owner-occupier housing finance commitments to rise by 1.5%.

The ABS said that “the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments continued to rise, increasing from 27.3% in March 2009 to 28.0% in April 2009.”

“In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions increased 3.6%. Investment housing commitments increased 8.9% and owner occupied housing commitments increased 1.9%.”

The “number of owner occupied housing commitments excluding refinancing, seasonally adjusted series rose 1.1% in April 2009 from March”…”while between March and April 2009, the average loan size for first home buyers fell $2,500 to $283,400, the second highest average value in the series. This is in contrast to the average loan size for all owner occupied housing commitments which rose $1,500 to $264,700 for the same period.”

“The number of finance commitments for the construction of dwellings for owner occupation seasonally adjusted series rose 1.3% to 5,641, the highest level since January 2002.” But the ABS said there was a 0.5% fall in the seasonally adjusted number of purchases of new homes.

The ABS said there was a slight fall in the amount lent for construction of new homes. In April it totalled $1.381 billion, down from the record $1.391 billion in March. The April figure was more than 24% above the $1.1 billion lent for new home construction in April 2008.

Since November (the first home buyers scheme was announced in October), a total of $7.2 billion has been approved.

Sale ends tomorrow.

Expect more from your journalism.

Crikey is an independent Australian-owned and run outfit. It doesn’t enjoy the vast resources of the country’s main media organisations. We take seriously our responsibility to bear witness.

I hope you appreciate our reporting and consider supporting Crikey’s work. Join now for your chance at election themed merch.

Peter Fray
Peter Fray
Join now