Australian Consumer Sentiment Rises 6% in August but Remains Pessimistic

The Westpac-Melbourne Institute Consumer Sentiment Index increased by 6% in August, reaching 88.9, up from 83.9 in July. Despite this rise, the index remains significantly lower than levels recorded a year ago, indicating that consumer sentiment is still firmly in pessimistic territory. The improvement was primarily observed among mortgage holders and was influenced by the Reserve Bank of Australia's (RBA) decision on August 11 to maintain the cash rate.

Responses collected after the RBA's announcement showed a notable increase in sentiment, while those gathered before the meeting showed little change from July. Renters experienced a temporary boost in sentiment following the RBA's decision, but overall, their confidence declined for the month as pre-meeting responses were lower than those in July. The survey highlighted that pessimists continue to outnumber optimists, particularly regarding current household finances.

Concerns about unemployment also surfaced, with expectations rising above the long-run average, partially reversing a previous month's improvement. Additionally, house price expectations softened amid a weakening property market, although renters expressed less likelihood of anticipating price declines and were more pessimistic about home purchasing prospects. Overall, 59% of respondents still expect further increases in mortgage rates, indicating that while the RBA's hold decision provided some reassurance, it did not significantly alter the prevailing outlook for future rate hikes.

© 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Source: KLEA News