Consumer survey shows signs of optimism after rate cuts
But the nation has been down in the dumps for the second longest period since the respected Melbourne Institute Consumer Sentiment Index began its survey 50 years ago.
AUSSIES may start feeling optimistic after the third RBA rate cut of 2025, new data shows.
The nation has been down in the dumps for the second longest period since the respected Melbourne Institute Consumer Sentiment Index began its survey 50 years ago.
A solid gain in August, took the 93.1 June score up to 98.5 – but that number still has to rise above 100 to be in positive territory.
Westpac’s Head of Australian Macro-Forecasting Matthew Hassan, who released the findings, said
“It has been 42 months since Australian consumers last registered a Sentiment Index read above 100 – the second longest period of continuous pessimism since our survey began in 1974, second only to the deep recession of the early 1990s.
“This long run of consumer pessimism may finally be coming to an end.
“August’s 5.7 per cent rise means the Index is now just 1.6 per cent away from being back in net positive territory.”
Households were less anxious about money, Hassan said.
The ‘family finances vs a year ago’ sub-index rose 6.2 per cent to 84.2, while the ‘family finances, next 12 months’ measure lifted 5.4 per cent to 106.8.
Gains were not confined to those with a mortgage either.
Renters improved as cost-of-living pressures eased, and mortgage holders have recovered since mid-2024.
“The RBA’s August rate cut has reinforced expectations for further interest rate declines,” Hassan noted.
“Amongst those surveyed after the RBA decision, just over half of consumers with a view expect mortgage rates to be lower in a year’s time. The figure is closer to 60 per cent amongst consumers with a mortgage.”
Big-ticket spending intentions improved, with the ‘time to buy a major item’ index up 4.2 per cent to 101.7.
Outside of housing costs, households were also said to feel less anxious about jobs, with unemployment expectations easing to levels consistent with a steady labour market.
The rate cut gave a substantial boost to housing sentiment, with the ‘time to buy a dwelling’ index climbing to a four-year high, up 37 per cent on last year.
Confidence in property prices also remains very strong, with expectations sitting close to their highest in more than a decade.
