REPEAT: MNI: Australia Sentiment Up But Housing Mkt A Risk

Repeats Story Initially Transmitted at 23:30 GMT Oct 9/19:30 EST Oct 9

--Westpac-MI Consumer Sentiment Above 100 for 11 Straight Months

--View On Labor Market Solid Despite Small Drop

By Sophia Rodrigues

     SYDNEY (MNI) - Consumer sentiment rose in October to stay in the optimistic

zone for 11 months in a row but the survey details were mixed with expectations

on the labor market supportive for growth and inflation outlook, while housing

market remains a risk.

     Overall, the data is still supportive of the Reserve Bank of Australia's

narrative that the next move in the cash rate is more likely to be up, than

down, but much depends on how the housing market evolves in the months ahead and

the impact it has on household spending.

     Data published by Westpac-Melbourne Institute Wednesday showed consumer

sentiment rose 1.0% m/m to 101.5, marking a small rebound from a 5.2% fall in

the two months prior.

     The latest rise was likely a reflection of strong economic growth, solid

labor market and ongoing recoveries in the previously weak mining states. 

     But consumers remain concerned about interest rates and house prices.

Sentiment among households with a mortgage weakened further in October, down

0.8% to mark at total 6.4% fall in the last two months.

     The "time to buy a dwelling" index fell 0.9% in October, after a 4.8% fall

in September, though it was still well above the lows seen through mid-2017,

indicating support for housing demand at lower prices.

     Consumer expectations for house prices was very disappointing, falling 7.4%

in October to take the index to the lowest level since the survey question was

run in May 2009. House price expectations were particularly weak in New South

Wales and Victoria.

     Expectations on the labor market also softened a little but the index on

unemployment expectations was still a solid 5% higher than a year ago.

     Westpac's chief economist Bill Evans maintained his view that the RBA will

leave the cash rate on hold in 2018, 2019 and 2020.

     From Westpac-Melbourne Institute Index of Consumer Sentiment for October

published Wednesday:

                                        October  September

----------------------------------------------------------

Sentiment Index                           101.5      100.5

Current-Conditions Index                  103.6      102.5

Expectations Index                        100.1       99.2

Family Finances Vs Year Ago                87.4       85.2

Family Finances Next 12 Months            102.8      102.2

Economic Conditions Next 12 Months        100.2      100.2

Economic Conditions Next 5 Years           94.9       95.2

Good Time to Buy Major Household Items    119.8      119.7

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

[TOPICS: MTABLE]