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Westpac: Australian mortgage-holder sentiment at 1994-era low
Westpac said its November consumer sentiment index fell to 78.2, a four-year low, and mortgaged-household sentiment dropped to 68.1, the weakest reading on that series since 1994.
The Westpac–Melbourne Institute Consumer Sentiment Index fell 2.7 percent to 78.2 in November from 80.4 in October, Westpac said, calling the reading a four-year low1.
At 78.2, the bank said the index was the lowest since late 2022, when annual inflation was near 8 percent and the Reserve Bank of Australia had raised the cash rate by about 4 percentage points in a little over a year1.
Westpac said readings this weak had previously been seen at the onset of the COVID pandemic, during the global financial crisis, and in the early-1990s and early-1980s recessions1.
Sentiment among consumers with a mortgage fell 11.6 percent to 68.1, which Westpac described as a record low on measures going back to 19941. The Guardian also reported that mortgaged-household reading as the weakest since 1994.
Westpac attributed the November drop to cost-of-living pressure, citing petrol prices near A$2.40 a litre, official inflation at 4.3 percent year on year, and an RBA cash-rate increase of 25 basis points to 4.85 percent, an 18-year high1.
Among those surveyed after that RBA decision, 72 percent expected mortgage rates to rise further over the next 12 months, down from 80 percent a month earlier, Westpac said1.