Housing finance commitments steady in January; Consumer sentiment sinks and unemployment fears rise: Midday Roundup

The value of dwelling commitments has remained flat in January, according to the latest figures from the Australian Bureau of Statistics, despite analysts predicting a rise.

The value of dwelling commitments dropped by 0.4%, seasonally adjusted, to $26.864 billion. While the biggest fall came from the value of investment housing loans, which dropped 3.3% to $10.335 billion.

The number of owner occupied dwelling commitments remained steady at 51,054, seasonally adjusted, however finance commitments for the construction of dwellings jumped 5.8% to 6081.

Consumer sentiment sinks and unemployment fears rise

Figures from the Westpac Melbourne Institute Index of Consumer Sentiment showed a decline of 0.7% in March, from 100.2 in February to 99.5.

Westpac senior economist Matthew Hassan said the index has now fallen 10.9% from its peak of 110.3 in November 2013, and is at its lowest level since May 2013.

“The initial declines in December-January looked to be mainly the unwinding of the election-related sentiment boost,” he said.

“More recent falls though have had a very clear theme centring on a sharp loss of confidence in the economic outlook and escalating job-loss fears.”

He said that bad news around the motoring industry, Qantas job cuts and manufacturing declines are “rattling consumers”.

The index found that over 66% of consumers thought that news relating to economic conditions was all negative.

The Westpac Melbourne Institute Index of Unemployment Expectations rose by 5.5% to be 13.6% above its November level. It was at 164.4, which Westpac reports is an “extreme high” not seen since the 2008-09 GFC.

Shares fall on open

Aussie shares have plunged on open, following a negative day on Wall Street.

The S&P/ASX200 benchmark was down 56.5 points to 5357.3 at 11:55am AEDT. Overnight the Dow Jones closed 67.43 points lower, down 0.41% to 16,351.25.