Australian consumer confidence has fallen back towards levels not seen in around 50 years, with cost-of-living pressures again becoming a major concern for households, according to Westpac’s latest consumer sentiment survey.
The survey found growing pessimism about family finances, with inflation and taxation issues dominating the news topics most noticed by respondents.
Westpac senior economist Matthew Hassan said the temporary relief provided by the fuel excise cut had faded, while falling property prices and broader economic concerns were weighing on sentiment.
“With no immediate end to the Middle East conflict in sight, responses in June showed particularly high recall for news on ‘budget and taxation’ and ‘inflation’,” Hassan said.
According to the survey, 85% of consumers viewed inflation-related news negatively, while about 70% considered budget and taxation news unfavourable.
“Cost-of-living issues came back with a vengeance in June. Australian consumers are clearly bracing for more bad news on the financial front,” Hassan said.
Confidence in property investment also weakened significantly. Just 4.5% of respondents said real estate was the wisest place for savings, the lowest result recorded since the survey began in 1974 and well below the long-term average of 24%.
Hassan said the result reflected falling prices in some housing markets, actual and expected interest rate increases and major housing tax policy changes announced in the federal budget.
Financial markets are currently pricing in almost no chance of a Reserve Bank interest rate rise next week, although markets see close to a 50% chance of an increase at the following meeting in August.