In the wake of discussions about potential reforms to negative gearing policies, the ANZ-Roy Morgan Consumer Confidence Index has taken a hit, dropping 1.2 points to 82.6.
The decline is most pronounced among homeowners, who have seen a significant 5.2-point fall in confidence, driving it to the lowest level of the year.
Consumer confidence currently stands 4.5 points higher than the same week last year (Feb. 6-12, at 78.1), but is 1.2 points lower than the 2024 weekly average of 83.8.
The index’s persistent stay below the 85-mark for a record 54 weeks underscored a continued atmosphere of caution among Australian consumers, despite a slight year-over-year improvement.
Consumer confidence showed mixed trends across the states, rising in Victoria, Western Australia, and South Australia, while declining in New South Wales and Queensland.
Currently, just under a fifth of Australians, 19% (a decrease of two percentage points), reported their families were financially better off than this time last year, in contrast to 52% (unchanged) who said their families are worse off.
Looking ahead, less than a third of Australians, 32% (a decrease of one percentage point), anticipated their family will be financially better off this time next year, whereas slightly more than a third, 34% (an increase of one percentage point), expected to be worse off.
Currently, just over one in 10 Australians, 12% (an increase of one percentage point), anticipated “good times” for the Australian economy over the next 12 months, marking the highest optimism recorded for this measure in nearly two years since April 2022. In contrast, nearly a third, 29% (a decrease of one percentage point), expected “bad times,” which is the lowest level of pessimism seen for this indicator in nearly two years since May 2022.
The overall sentiment about the Australian economy’s long-term outlook this week remained nearly steady, with 13% (a decrease of one percentage point) of Australians optimistic about “good times” for the economy over the next five years, versus just under one-fifth, 18% (a decrease of one percentage point), anticipating “bad times.”
Buying intentions declined this week, with only 21% (a decrease of two percentage points) of Australians considering it a “good time to buy” major household items, whereas 51% (an increase of two percentage points) believe it is a “bad time to buy.”
Adelaide Timbrell (pictured above), ANZ senior economist, noted a complex interplay of factors influencing consumer mood, including the Reserve Bank of Australia’s latest rate decisions and ongoing economic adjustments.
“ANZ-Roy Morgan Australian Consumer Confidence decreased last week but was still above all results from mid-February to December 2023,” Timbrell said.
“Short term economic confidence rose to its highest level since April 2022, before the RBA hiking cycle began. Those paying off their homes had higher confidence in the week, presumably due to the RBA holding rates again in February, while outright homeowners (who often benefit from higher interest rates) had slightly lower confidence through the week.
“The RBA board continued its tightening bias in its post meeting statement and Governor Bullock reiterated in the RBA press conference that the board was not ruling anything in or out.”
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
