Mining to Unearth Home Owner Confidence in 2013

Most home loan customers expect a slowdown in mining to make an economic recovery in 2013 more difficult, according to a survey by leading mortgage broker Loan Market

Loan Market Corporate Spokesman Paul Smith said a survey of the company’s home loan customers found 34 per cent said a potential mining slowdown has dampened their economic outlook for 2013.

Mr Smith said that only 13 per cent of the 706 respondents thought the country was already in good shape and 23 per cent said the country was heading in the right direction.

He said that a quarter of those surveyed said that further incentives and stimulus were needed to boost the economy, even after the December RBA rate cut of 25 bps.

“The rate cut last week will obviously help home owners save money going into the new year, but it’s clear Australians have concerns that the mining sector has peaked and it’s going to have a wide spread impact on the economy.

Mr Smith said that the RBA may need to be more aggressive in supporting the economy in comparison to the wait-and-see approach adopted during 2013.

“The RBA will need to be proactive in 2013 to combat any falling sectors that have been supporting the economy. This will be a critical area to ensure inflation and employment stay within targeted areas.

“There’s an indication from a majority of consumers that the upcoming year is expected to be challenging and there’s a subdued confidence that economy is heading in the right direction,” said Mr Smith.

Mr Smith said that home owners would continue to see low interest rates into the first quarter of 2013 but that the general uncertainty of global economic conditions made any long term forecasting difficult.

Survey Results:

What is your outlook of the Australian economy heading into 2013?

                                                                                                 All        Gen-Y

a) We’re heading in the right direction                                      23%     30%

b) Further incentives and stimulus are needed                        26%     25%

c) A mining slowdown is going to make things difficult            37%     33%

d) The country is in good shape                                               13%     12%