THE GENERAL ECONOMIC CLIMATE
Here we’re talking about things like
inflation and employment levels.
It seems obvious that periods of low
inflation and high employment would see an uptick in borrowing as consumers
look to spend the extra cash in their back pockets.
And as we know, when buyers fight over
property purchases, values are only going to go upwards.
CONSUMER CONFIDENCE
Rising consumer confidence increases
consumer spending, especially on significant purchases such as a new home or an
investment property.
In other words, a robust economic
climate and rising property prices cause a "wealth effect” which leads to
higher consumer confidence where buyers think it's the opportune time to spend
their spare cash on a property.
On the other hand, low consumer
confidence tends to slow down our property markets.
However currently, consumer confidence
is low related to inflationary and economic concerns, yet our housing markets
keep rising because population growth is pushing demand significantly higher
than supply.
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Jason Gwerder
Thursday, 7 September 2023
