Best time to buy a house in three years

Despite consumer confidence rising, most of us are still pessimistic.

According to a poll by the Melbourne Institute and Westpac Bank, consumer sentiment rose 1% to 99.2 in October, following on from a 1.6% rise the previous month. A value under 100 shows that overall, we are still pessimistic about the economy improving. The index tracking expectations of economic conditions over the next 12 months, and the five year outlook both fell, compared to last month.

The poll was conducted in the week when the Reserve Bank of Australia (RBA) cut interest rates by 0.25%, but three of the four major banks passed on just 0.2% of that, while Australia and New Zealand Banking Group (ASX: ANZ) has yet to pass on anything. That may have contributed to some consumers still being less confident about the future.

The most encouraging result came from the index tracking views on time to buy a house, which jumped 9.6%, adding 17.9% in the last two months, and reaching its highest level since September 2009, which was in the midst of low interest rates and government stimulus. With economists forecasting the RBA will cut rates again in November, we could see another rise in the index next month.

That will come as welcome relief to the housing sector, which is reportedly in its worst state in 20 years. Construction and building companies, and housing product suppliers like GWA International (ASX: GWA), Brickworks Limited (ASX: BKW) and Reece Australia Limited (ASX: REH) will be hoping for a turnaround in their businesses. All three have been suffering since the GFC, with their share prices down at least 20% since October 2007, reflecting their business performance.

In a promising sign for retailers, the index measuring whether it was a good time to buy a major household item rose 3.7%.

The Foolish bottom line

Whatever the outlook, Foolish investors should ignore the noise, and focus on selecting high quality businesses that pay decent dividends and picking up those same stocks at a cheap price.

If you are just looking for ASX investing ideas, look no further than our brand new free report: The Motley Fool’s Top Stock for 2012-13. In this free report, Investment Analyst Scott Phillips names his top pick for 2012-13…and beyond. Click here now to find out the name of this small but growing software company with huge potential. But hurry – the report is free for only a limited period of time.

More reading

Motley Fool writer/analyst Mike King doesn’t own shares in any company mentioned. The Motley Fool’s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!