Consumer confidence increases as housing market continues boom

Consumer confidence has increased as Aussies say now is a good time to purchase major household items, the latest ANZ-Roy Morgan report has found. Despite the increase in consumer confidence, Aussies are still expecting difficult economic conditions over the next 12 months.

According to the report, consumer confidence has increased 1.7pts in the last week of January 2022, however it still sits significantly lower overall, at 10.3pts below the same week last year. 

New South Wales saw the largest increase in consumer confidence for the week, up 6pts, while those in Victoria saw a drop of 2.6pts. 

Aussies happy to shop in current economy

The report found 36% of Aussies believe now is a good time to buy a major household item, compared to 34% who believe now is a bad time to buy. Despite the mixed sentiment, other data shows Aussies have been willing to spend. 

Australia Post’s January 2022 eCommerce update shows purchase growth was up 1.5% year on year for the month of December, and up a massive 35% when compared to December 2019. 

The end of last year was certainly busier, despite a drop in purchases in December. Australia Post says there was an 11% fall in December when compared to the previous month, but that November had reached record highs. This trend shows that Aussies were looking to purchase and send festive gifts earlier due to well-publicised delays across the Australia Post shipping network.

Median house prices in capitals surpasses $1 million

The Australian housing market has continued to boom, with the median house price in capital cities now sitting at a record $1.066 million. This equates to a yearly price increase of 25.2% across all of the capitals. 

Conversely, the wage price index grew just 2.2% over the year, meaning Aussies may be justified in feeling they’ve missed a chance to jump into the property market. 

Along with house prices, petrol prices have been on the rise. January saw a 7% increase in retail petrol prices, which ANZ Head of Australian Economics, David Plank says “would usually elevate inflation expectations.” 

Plank notes, however, that “we should not read too much into a single data point, as inflation expectations can be quite volatile from week to week.”

Mixed expectations for the financial future

The ANZ-Roy Morgan report found Australians are unsure about the economic future ahead for the country. While 37% of Aussies expect their families to be “better off” financially this time next year, only 13% expect “good times” for the economy over the next 12 months compared to the 27% expected “bad times”. 

Over a longer term, 19% of Aussies are expecting “good times” for the Australian economy over the next five years, compared to 18% of Aussies expecting “bad times”.