Consumer sentiment pops up into positive
- Westpac Consumer Sentiment Index surges 12.8% to 103.8.
- First positive read since early 2022 and a seven-year high (excl. COVID period).
- Expectations improve as domestic recovery firms, trade risks subside.
- Strong gain is despite a less confident outlook for interest rates and jobs.
- ‘Mortgage belt’ is a notable exception, sentiment dipping across this sub-group.
- Christmas spending plans less restrained than last year.
“The Westpac–Melbourne Institute Consumer Sentiment Index surged 12.8% to 103.8 in November from 92.1 in October.”
“This is an extraordinary and somewhat surprising result. November marks the first ‘net positive’ read on consumer sentiment in the best part of four years. Recall that an Index above 100 means optimists outnumber pessimists. This is the first time this has happened since February 2022. Indeed, excluding the COVID disruptions in 2020 and 2021, this is the most positive result in seven years.”
“Much of the November sentiment gain is coming from a markedly more confident assessment of prospects for the economy. The ‘economic outlook, next 12 months’ and the ‘economic outlook, next 5 years’ sub-indexes both jumped sharply in the month (up 16.6% and 15.3% respectively). Both sub-indexes are now in solid positive territory, well above long-run averages.”
“The real surprise, though, is how much these positives have outweighed renewed concerns about inflation and the outlook for interest rates.”
“Consumers’ interest rate expectations did show a shift. Our Westpac–Melbourne Institute Mortgage Rate Expectations Index, which tracks consumer expectations for variable mortgage rates over the next 12 months, jumped 17.1% to 119.1, a fourteen-month high. Interestingly, responses over the course of the survey week showed those surveyed after the RBA decision were more confident and less hawkish on the interest rate outlook. Even so, 76% of those surveyed after the Bank’s decision expected mortgage rates to be the same or higher in a year’s time. This compares to 60% in October and 57% in September.”
“Despite their improved confidence around the outlook for the economy and family finances, consumers are more anxious about jobs. The Westpac–Melbourne Institute Unemployment Expectations Index rose 9.3% to 139.5 in November. The deterioration seems to reflect conditions on the ground, with recent labour force updates showing a renewed softening in employment growth and a lift in unemployment.”
“Homebuyer sentiment was largely unchanged in November, with the ‘time to buy a dwelling’ index ticking down 0.1% to 96.4. However there continues to be a widening divergence across age-groups with a much more positive 115 read amongst those aged 18–34 compared to 87 for those aged 35–50 and 84 for those aged over 50. The Federal Government’s expanded First Homebuyer Guarantee – which allow eligible applicants to purchase with a 5% deposit without having to pay loan mortgage insurance – appears to be driving the big lift in buyer sentiment among younger cohorts.”
“Meanwhile consumers remain very bullish on the outlook for house prices. The Westpac–Melbourne Institute Index of House Price Expectations edged up 0.3% in November to 172.4, marking a new cycle high. Just over 80% of consumers expect prices to rise over the next 12 months.”
The Westpac–Melbourne Institute Consumer Sentiment Index for November 2025 was released at 11 am (AEDT), on Tuesday 11 November 2025. The index for December 2025 will be released at 11 am (AEDT), on Tuesday 16 December 2025.
The Westpac–Melbourne Institute Survey of Consumer Sentiment Index measures changes in the level of consumer confidence in economic activity. Further information can be found here.