Australia Westpac Consumer Sentiment Weakens In January

(RTTNews) - Australia's consumer confidence weakened in January as consumers became more concerned about what 2026 may bring for family finances and the wider economy, Westpac said on Tuesday.

The consumer confidence index dropped to 92.9 in January from 94.5 in December.

Data showed that the January decline centred on expectations for the year ahead. Near-term expectations for family finances and the economy registered the sharpest declines in January, declining 4.5 percent and 6.5 percent, respectively.

This was partially offset by a small improvement in assessments of family finances vs a year ago and slight gains for the 'economic outlook, next 5 years' and 'time to buy a major household item' sub-indexes 0.9 percent and 0.2 percent, respectively. Moreover, 'family finances vs a year ago' index gained 2.3 percent.

Despite these modest improvements, all sub-indexes remained below 100. This was only the second time since October 2024 that pessimists outnumbered optimists across every component.

At 152.8, the Westpac- Melbourne Institute Mortgage Rate Expectations Index was at its highest level since July 2024.

Sentiment regarding the near-term outlook for jobs also deteriorated in January. The Westpac-Melbourne Institute Unemployment Expectations Index increased 2.1 percent to 129.4.

At the same time, homebuyer sentiment improved slightly in January but remained pessimistic overall. The 'time to buy a dwelling' index rose 4 percent to 89.6.

House price expectations continued to cool off in January. The Westpac-Melbourne Institute Index of House Price Expectations dipped 1.4 percent to 167.5 from 172.4 in November.

The Reserve Bank of Australia next meets on February 2 and 3. Westpac expects the bank to keep the cash rate on hold at this meeting and throughout the remainder of 2026.