Australian households with mortgages became markedly more pessimistic in November, as Westpac’s confidence gauge reached its weakest point in a record that began in 1994 amid inflation and higher rates.
Westpac’s mortgage-holder measure fell 11.6% to 68.1. The broader Westpac–Melbourne Institute Consumer Sentiment Index dropped 2.7% to 78.2 from 80.4 in October, its lowest reading since late 2022.
Westpac pointed to pressure from living costs. Petrol was approaching A$2.40 per liter, while official inflation measures stood at 4.3% year over year. The Reserve Bank of Australia (RBA) raised its cash rate by 0.25 percentage point to 4.85%, the highest level in 18 years.
Westpac said the share of respondents expecting mortgage rates to rise within a year eased from 80% in October to 72% among those surveyed after the latest rate decision. It had been 64% in September.
At a Nov. 3 media conference, RBA Governor Michele Bullock said sluggish spending and income growth could leave people feeling poorer and make conditions feel recessionary, although the central bank’s baseline forecast did not project a recession. Bullock said high inflation affects households unevenly, particularly exposing lower-income Australians and renters with little or no savings. Mortgage holders also face large repayments.
The RBA has cited domestic capacity pressures, weak productivity growth and stronger-than-expected demand among the forces behind price pressures. Westpac said similarly weak sentiment had appeared during the pandemic, the global financial crisis and recessions in the early 1990s and early 1980s.
Separately, The Guardian reported Albanese had described working with Treasurer Jim Chalmers on next month’s midyear budget update. The outlet said the update was expected to include spending cuts as pressure to contain inflation grew.
The RBA Monetary Policy Board is scheduled to meet Dec. 7-8.
