Is consumer confidence really a good thing?

Consumer confidence is on the increase, and it has been for a little while now. Sentiment is often quoted when you read about the economy and its recovery, and for many of us increasing sentiment equates to an improving economic situation.

  

However, recently I read an article that asked whether consumer confidence is actually a good thing. When you consider that the real estate market was booming just a couple of short years ago, and at that time consumer confidence was at an all time high, it didn’t turn out so well!

 

Maybe what we should be considering is consumer over-confidence. Of course, here in Australia we have not been as hard hit as other parts of the world, and I’ve made mention of that before. All of us at CENTURY 21 are realistic however, and the real estate market is of course a very different one to the one it was even twelve months ago. As a result, CENTURY 21 knows to go back to basics, and build on business fundamentals now so the hard times aren’t that hard, and the good times will be great.

  

What consumer confidence does show is that people are breathing a little easier and I think that’s a great thing. However old spending habits tend to die hard, and when confidence is up, there is the risk that the situations which caused the current market crash could return. Our current economy resulted from too much confidence and not enough rational thinking, and that’s a mindset that those in the real estate market can’t afford to return to.

Real estate decisions and purchases should always require rational thought, regardless of the state of the economy. The market right now is still offering some great buys for those who can afford to do so, and the market generally has also started to pick up, hence the increasing consumer confidence. And yes, we should be confident about that, and yes, it’s wonderful to see the industry on the up again, but we need to be careful we’re not too confident. The worst thing we could possibly do is return to overspending with little regard for where it could take us.  

Posted by Charles Tarbey on 01/06/2009 at 9:54 AM | Categories:

1 Comments

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PaydayLoans wrote on 04/11/2009 12:03 AM

Nice post and very helpfull

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