National Consumer Sentiment and Foreign Demand

The consumer mindset is another factor working to dampen housing conditions. The consumer sentiment survey from Westpac and the Melbourne Institute has consistently highlighted a pessimistic view from consumers around their expectations for house prices, which is likely another factor reducing the market demand.

The federal election and the potential for changes to taxation policy is probably also weighing on consumer attitudes.

From a demand perspective, foreign buyers are a much smaller component of the housing activity. FIRB data shows that residential dwelling approvals for foreign buyers are down more than 70% since moving through the highs of 2015.16. The reduction in foreign buying activity is likely to have a great impact within the high-rise apartment sector where activity was previously most concentrated.

Not to mention, the fact that new developments can now only 50% of units offshore whereas previously 100% could be sold offshore.