Consumer Sentiment Could Influence House Prices, Reveals Rick Otton
(PRWEB) June 06, 2014 -- New survey figures from the Westpac-Melbourne Institute revealed that consumer sentiment across capital cities plunged 6.8 percent last May. Analysts said that this has been the lowest figure recorded since August 2011, the Sydney Morning Herald reported on 2 June 2014.
After examining the extensive data, Rick Otton, owner and director of We Buy Houses Pty Ltd, commented that consumer sentiment has long influenced prices within the Australian real estate market, whether it be a good or a bad influence.
“I call this phenomenon the ‘wealth effect.’ When people believe that they have money on their hands they start spending their cash. This is a good thing, since this helps the economy grow, and banks also become obliged to lend more money to people. Unfortunately, when people stop spending, like what happens when consumer sentiment is down, the market stops to move and there is no growth,” according to Mr. Otton.
“Remember that just a few weeks ago demand for Australian real estate was at at a high around the country. If the demand drops because of lower consumer confidence, there’s a big chance that house prices will become stagnant or drop since statistics show a strong correlation between the two,” he added.
Mr. Otton then explained in an interview for his weekly podcast show that if the growth of house prices stalls or slides, it wouldn’t be a problem for people who bought houses for sale with the end in mind.
“I always tell my students to enter the real estate market with an exit strategy on their minds. To protect your investment against the effect of fluctuating consumer sentiments, I recommend using a flexible scheme which helps people get in and out of properties without spending too much money upfront or taking out a new bank loan in the process,” he said.
Learn more about creative real estate strategies by tuning in to Rick Otton’s weekly podcast show. Visit http://creativerealestate.com.au/ today to access all episodes and transcripts free of charge. The Creative Real Estate Show is also available in iTunes.
Australian property investment specialist, Rick Otton, has been developing, sharing and teaching his innovative real estate strategies for 23 years. As the founder and CEO of We Buy Houses, which operates in the US, UK, Australia and New Zealand he is known for introducing cutting-edge techniques that have enabled previously disenfranchised people to get out of the rental cycle and into their own homes.
His innovative low-risk, high-reward approach to Australian real estate investing has been featured in a variety of television programs and magazines, including Today Tonight, Hot Property and Australian Property Investor. His real estate book, published in 2012, ‘’How To Buy A House For A Dollar’, voted by Money Magazine and Dymocks Book stores as one of the Top 10 Most Popular Finance Titles for 2013.
As well as conducting free seminars, workshops and conferences in the UK and Australia, Mr Otton releases a weekly podcast on iTunes, Creative Real Estate. In these he shares examples of real transactions, and you can listen to his students share their own experiences using his strategies.
Go to CreativeRealEstate.com.au to listen to Rick’s free podcasts.
Jose Climaco, rickotton.com, http://www.rickotton.com, +61 497081882, [email protected]
Share this article