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Consumer sentiment in Australia slipped in January, mainly due to concerns over mortgages.
The Westpac-Melbourne Institute Consumer Sentiment Index fell to 92.9 in January from 94.5 in the previous month, according to a Tuesday joint press release.
For the second time since October 2024, all sub-indexes were below the reading of 100, which shows pessimists outweighing optimists in every component, Matthew Hassan, Westpac’s head of Australian macro-forecasting, said.
Hopes for higher mortgage rates weakened as the Reserve Bank of Australia left rates steady at 3.6% in December 2025.
The number of consumers surveyed to have been expecting mortgage rates to rise fell month on month to 64% from 68%, according to the Westpac-Melbourne Institute survey.
The property market is still trying to rebound as dwelling approvals are still below pre-pandemic levels. A recent survey from Westpac showed that total dwelling approval surged in November 2025 to 15.2% month on month and 20.2% year on year, but the Westpac-Melbourne Institute survey shows that homebuyer sentiment, which rose 4% to 89.6, was still way below the optimistic margin.
Hassan said the survey showed that the expanded Home Guarantee scheme continues to aid homebuyers as sentiment inched 5.7% higher to 103.9 among 18-year-olds to 34-year-olds.
“While confidence is still well above the extreme lows recorded during the protracted ‘cost of living’ crisis in 2022-2024, consumers are becoming more concerned about what 2026 may bring for family finances and the wider economy,” Hassan said