An academic says consumer confidence is booming in the Illawarra, judging by new figures for one of the region’s biggest shopping centres.
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Alex Frino, Professor of Economics at the University of Wollongong said over the 12 months to June 30, 2017, people spent $450 million at Stockland Shellharbour – up 5.7 per cent over the same period last year.
Prof Frino said consumer confidence is important for the economy because it reflects how people feel about their income and income stability.
“If they feel ‘safe’ then they are more confident and spend more,” he said.
“Consumer confidence underpins consumer spending. In turn, consumer spending drives economic growth because when consumers spend more, business needs to invest and grow to meet that consumer demand.”
This week the Stockland property group released its annual report.
“Buried in the back of the report is a ‘gem’ of a piece of data that tells us a lot about consumer confidence in the Illawarra region,” Prof Frino said. “The $450 million that consumers spent at Stockland Shellharbour and the significant increase over the previous financial year tells us that consumer confidence is booming and consequently people are spending more – at the very least in the southern suburbs of the Illawarra.
“This latest figure squares well with the unemployment and building approvals data we have seen for the Illawarra in the past few months.
“They all point to a buoyant and strong Illawarra economy and there is no doubt the improvement in the jobs situation, building approvals and the low interest rates that are driving all of this prosperity will continue for some time yet.”
Prof Frino said Stockland Shellharbour is currently valued at $760 million, which according to Stockland is about 17 per cent higher than it was valued four years ago.
“This means that the property has increased in value by about 4.5 per cent per annum – not bad, but nowhere near the close to seven per cent per annum that we have seen in Illawarra house price growth over the past few years.”
Stockland managing director and CEO Mark Steinert said their Commercial Property delivered a good performance, despite challenging conditions in the retail market.
“Our shopping centres are the heart of the communities they serve, and are the town centres of the future,” he said. “Our diversified business model enables us to leverage community creation through our centres, which we continue to enhance by providing lifestyle, food, service, entertainment and leisure precincts to improve customer experience.”
GPT also released its results this week, which Prof Frino said includes a glimpse into the fortunes of Wollongong Central.
“The group values the property at $432.8 million - up a staggering 10.6 per cent year-on-year,” he said.
“Annual turnover for Crown Central came in at $272.4 million for the year, up 1.5 per cent.
“While still positive, the annual turnover figures are impacted by the closure of Myer in October last year as well as development going on in and around the Centre. While heartening, the changes going on to the Crown Central property prevent a clean read on consumer confidence.”