Consumer confidence continues to rise with home-buyer confidence also high: Westpac index

Larry SchlesingerDecember 7, 2020

Consumer confidence continued to rise above two-year highs in March - despite no rate cut.

The Westpac-Melbourne Institute Index of consumer sentiment rose 2%  in March to 110.5, its highest level since December 2010.

This follows a 7.7% increase in February – the biggest monthly gain since September 2011 – when the index rose from 100.6 in January to 108.3.

It is the fifth month in a row that the index has been above 100 with sentiment now 15% higher than its year ago level.

A reading of 100 or more indicates that optimists outnumber pessimists.

Confidence about buying a house or unit remains high with ‘time to buy a dwelling’ index up 1.6% and is now up almost 20% over the past 12 months.

The latest survey was carried out just after the RBA left the cash rate on hold at 3% on March 5, indicating a more broader improvement in confidence beyond the cost of borrowing money.

Westpac chief economist Bill Evans called it a " strong result" 

“Consumers would have been buoyed by the positive run on markets," Evan said.

Commonwealth Bank economist Gareth Aird says consumer sentiment was "buoyed by increased optimism over family finances and the economic outlook".

"The increase in the attractiveness of dwelling investment stems from lower interest rates, rising rental yields and a stabilisation in house prices," says Aird.

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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