subscribe to our newsletter

February sees bump in consumer sentiment

Consumer sentiment rose 2.3 per cent in February, as public concern over the Australian bushfire crisis and coronavirus outbreak eases.

According to the Westpac-Melbourne Institute, the February editions of the Index of Consumer Sentiment came in at 95.5, up from 93.4 in January.

Despite the modest lift in sentiment, the index sits will below its long run average of 101.4 and remains firmly in the pessimistic territory, according to Westpac senior economist Matthew Hassan.

According to Mr Hassan, increasing consumer sentiment “likely reflects” the easing public concern following the ongoing national bushfire crisis, in light of extensive rainfall in bushfire-affected regions, which saw several large fires contained.

Other factors affecting improved consumer sentiment include the Reserve Bank of Australia’s decision to hold the official cash rate, showcasing a positive medium-term outlook for the domestic economy and reducing shock over the international outbreak of coronavirus, which has shown little impact on the Australian market.


The improved consumer sentiment in February was largely driven by bumps in the the sub-indices related to the economic outlook, as the “economy, next 12 months” sub-index rose by 5.4 per cent in February, while the “economy, next 5 years” sub-index rose by 4.3 per cent, with both indexes partially reversing the sharp falls seen over the last two months.

The sub-index for “time to buy a major household item” grew by 2.7 per cent in the month but sits at 1.3 per cent below its November 2018 level and 10.6 index points below its long run average, suggesting consumers are continuing to limit their discretionary spending.

However, the index showed that outlook on family finances has taken a dip in February, despite the RBA’s efforts to stimulate spending with interest rate cuts, recent tax cuts and an upturn in the housing market.

Sentiment towards the family “finances now versus a year ago” sub-index down 1 per cent since January, close to its recent low point, while the “finances next 12 months” index held steady at a low level.

Housing-related consumer sentiment remains mixed as the housing market continues to improve, according to Mr Hassan.


Buyer sentiment, recorded through the “time to buy a dwelling” sub-index, fell by 5.6 per cent in February, falling back close to its recent low point after a gain in January but remaining well above the 2017 lows, at the height of the previous property cycle.

The “house price expectations” index grew by 0.2 per cent in February, resulting in the index soaring by 70 per cent over the last nine months.

The index showed the house price expectations continue to lift in the country’s biggest markets, up 4.5 per cent in the month in NSW and up 1.7 per cent in Victoria.

In the nation’s smaller markets, expectations for property prices remain subdued, with Queensland reporting a 3.7 per cent drop in the index and Perth falling by 12.9 per cent in February.

[Related: Auction volumes bounce after slow start to 2020]

February sees bump in consumer sentiment
February sees bump in consumer sentiment

Hannah Dowling

Hannah Dowling is a journalist for mortgage business, the leading source of news, opinion and strategy for professionals working in the mortgage industry.

Prior to joining the team at Mortgage Business, Hannah worked as a content producer for a podcast catering to property investors. She also spent 6 years working in the real estate sector at a local agency. 

Hannah graduated from Macquarie University with a Bachelor of Media and Journalism. 

You can email Hannah at: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

Politicians have traded blows while debating the repeal of responsible lending laws in the lower house, ahead of today’s Senate hearings. ...

The non-bank lender reported an 88 per cent rise in profit and a 14 per cent increase in its loan book over 1H21, despite a drop in the volu...

There was a 26 per cent rise in loans originated through the broker channel at the non-major bank as at 31 December 2020, according to its r...


Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.


LATEST PODCAST: BOQ’s acquisition of ME Bank

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.