Consumers say ‘tis the season of hope and spending
While 2025 has brought a lot of difficult news for families, many are determined to look past that and towards Christmas cheer and retail therapy.
A KEY measure of Australian consumer sentiment has shown a sharp rise in the lead-up to the festive season.
The Westpac–Melbourne Institute Consumer Sentiment Index surged 12.8% to 103.8 in November, from 92.1 in October.
An index over 100 means optimists outnumbered pessimists.
It’s the first positive read since 2022 and a seven-year high (excluding the COVID period disruptions.)
“This is an extraordinary and somewhat surprising result,” said Westpac’s Head of Australian Macro-Forecasting, Matthew Hassan.
He conceded sentiment was only marginally positive, but said the index was supported by sub-surveys showing marked confidence in the longer-term economic outlook.
“The move likely reflects several developments,” Hassan explained. “Domestically, there are clearer signs that a recovery is gaining momentum, especially around consumer demand and housing markets.
“Meanwhile, external threats also appear to have eased with a de-escalation of US–China trade tensions and recent meetings between Australia and the US resulting in a new deal on the supply of critical minerals and rare earths.
“The real surprise, though, is how much these positives have outweighed renewed concerns about inflation and the outlook for interest rates.”
The Reserve Bank’s decision to hold the cash rate at 3.60% at its November meeting was “less unsettling than feared.”
Homebuyer sentiment was largely unchanged, although those aged 18-to-34 were more positive about their chances.
“The Federal Government’s expanded First Homebuyer Guarantee appears to be driving the big lift in buyer sentiment among younger cohorts,” said Hassan.
