LOWER consumer confidence could put a dampener on a housing market, which had shown strong improvements since the start of the year.
The latest consumer sentiment data from Westpac and the Melbourne Institute revealed that consumer confidence had fallen for the fourth consecutive month.
RP Data research director Tim Lawless said the index did move around a lot from month to month, so as a result following the trend was more important than the monthly result.
“However we have seen the index move lower over five of the past six months which indicates a softening consumer mind set,’’ he said.
Mr Lawless said consumer confidence and housing market conditions were highly linked.
“If a consumer is lacking confidence in their household finances they aren’t going to be as prepared to make a high commitment decision such as purchasing a property,’’ he said.
Mr Lawless said if consumer confidence continued at similar levels in the coming months, he thought the “exuberant’’ housing market conditions would taper off.
He said at the moment even though confidence levels had eased, consumers still viewed the housing market as a ‘wise’ place for their savings.
“Consumer confidence can be fickle, and we may see the consumer mind set bounce back to a more optimistic position if the jobless rate stabilises and economic data flows improve,’’ he said.