A measure of Australian consumer sentiment fell back in June as rising borrowing costs and higher petrol prices squeezed family finances, a survey showed on Tuesday, while expectations for the housing market also cooled.
A Westpac-Melbourne Institute survey showed its main index of consumer sentiment fell 2.9% in June to 80.6. A reading below 100 means pessimists considerably outnumber optimists.
“At 80.6, the latest monthly Index read is back amongst the weakest seen in the fifty-year history of the survey,” said Westpac’s head of Australian macro-forecasting, Matthew Hassan.
“Other concerns may be starting to emerge with a sharp drop in house price expectations suggesting some consumers are becoming more unsettled about the impact of recently announced tax changes.”
The Labor government last month announced proposals to cut tax breaks on buying homes to rent, which has long been a popular investment vehicle in Australia.
Sentiment has also been hard hit by three increases in interest rates from the Reserve Bank of Australia this year and a surge in petrol prices following conflict in the Middle East.
Expectations for family finances fell sharply in June as cost-of-living pressures dominated, while the longer-term outlook for the economy also darkened.
The Time to Buy a Major Item sub-index edged up slightly, but at 86.4 remains far below the long-run average of 123.0. Sentiment on housing remained weak, with consumers paring back expectations for future price rises.
