Confidence boosted with good time to buy a home outlook rising 3.7% cent: Westpac-Melbourne Institute sentiment index
Consumer confidence was higher in August, according to the Westpac-Melbourne Institute consumer sentiment index, which rose 3.5% as lenders cut mortgage rates.
The result was close to 10% up on a year ago, though still seven per cent below 2010 levels when household respondents were initially optimistic the 2007-2008 global financial crisis had passed.
The latest August 6 rate cut led to a bounce in the outlook for people deciding to possibly buy a dwelling, Westpac's chief economist Bill Evans noted.
The overall 3.5% jump in sentiment was accompanied by a 3.7% rise in those surveyed saying it was a good time to buy a home.
The index had a big jump immediately following the Reserve Bank's easing taking the cash rate to a record low of 2.5%.
"The rate cut is likely to have had a solid positive impact on sentiment," said Mr Evans.
Westpac expect another rate cut in November.
"Further evidence of the positive response can be found in the response of those folks with a mortgage with their confidence lifting by 7.4%," Mr Evans said.
Responses on spending intentions were mixed as the index of whether it was a good time to buy a major household item dropped 5.5%.