Australian consumer sentiment soared to its highest level in over three years in August, buoyed by recent Reserve Bank of Australia (RBA) rate cuts and easing cost-of-living pressures, according to a Westpac-Melbourne Institute survey released Tuesday.
The Westpac-Melbourne Institute Consumer Sentiment Index climbed 5.7% to 98.5, up from a modest 0.6% gain to 93.1 in July. While still below the 100-mark separating optimism from pessimism, the reading is the strongest since early 2022.
Survey results indicate households are growing more confident about their finances and the broader economy over the coming year. Westpac economists noted the rebound largely reflects the RBA’s more accommodative stance, with three rate cuts this year helping ease mortgage stress and encouraging expectations of further relief.
Confidence gains were broad-based, benefiting both mortgage holders and renters amid moderating cost pressures. Analysts also cited easing tariff-related uncertainty as a contributing factor.
Westpac expects the RBA to adopt a “meeting-by-meeting” approach, keeping cash rates steady in September before potentially cutting another 25 basis points in November.
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