The Westpac consumer sentiment index fell sharply by 2.9% to 80.6 in June, reflecting widespread pessimism among Australians about personal finances, the broader economy, housing conditions, and savings habits.
The survey has now returned close to its lowest levels in 50 years, with negative sentiment outweighing positive views by nearly 20 percentage points.
Household financial perceptions also weakened further, with assessments of finances compared to a year earlier dropping 7.5% to 67.3, while expectations for the next 12 months declined 8.5% to 85.1.
These readings point to unusually weak sentiment, with scores below 85 appearing only a few times over the past 50 years.
Westpac noted that consumers appear to be “bracing for more bad news,” even as concerns about mortgage rates have eased slightly.
The economic outlook remains mixed. Expectations for the economy over the next 12 months rose 4.9% to 77.8, indicating a slight improvement, although sentiment remains weak overall. In contrast, views on the five-year outlook fell 3.2% to 86.5, marking a three-year low.
While the March quarter GDP growth of +0.3% may have helped ease some near-term pessimism, confidence over the medium term has continued to deteriorate.
Major purchase intentions remain subdued, with the ‘time to buy a major item’ sub-index sitting 37 points below its long-run average at 86.4. Westpac said households are still in a “buyer restraint” phase.
The ‘time to buy a dwelling’ index did improve 12.6% to 81.1, but it remains at very weak levels overall.
In contrast, house price expectations dropped sharply, falling 14.9% to 128.2 and slipping below the long-run average for the first time in nearly three years.
The steepest declines were recorded in New South Wales and Victoria, where sentiment fell 19% and 18% respectively amid ongoing price corrections. Western Australia remains the weakest market for buying sentiment, with an index reading of 59.
The quarterly ‘wisest place for savings’ survey points to a significant erosion of confidence in property. Only 4.5% of respondents now view real estate as the best savings option, a record low and far below the long-run average of 24%. In comparison, 31% prefer bank deposits, 27% favour paying down debt, and 8% choose superannuation. Overall, around two-thirds of consumers now lean toward low-risk savings options.
Furthermore, the unemployment expectations index held steady at 139.8, remaining above its long-run average and indicating continued concern about job security and future employment prospects.
Meanwhile, the mortgage rate expectations index declined by 4.8% to 172.6. Although two-thirds of respondents still expect rates to rise, this share has eased compared with May.
The Reserve Bank of Australia is widely expected to pause interest rate hikes at its mid-June meeting after three consecutive increases. However, Westpac still forecasts additional tightening ahead, pointing to inflation that remains above target and ongoing pressures from energy prices.