Confidence levels have surged since the latest cut to interest rates, according to the Westpac Melbourne Institute Index of Consumer Sentiment.
Even better, family finances are in better shape and more people think it’s time to buy a dwelling.
The Index rose by 3.5 per cent from 102.1 in July to 105.7 in August, its highest point since March 2013.
Westpac Chief Economist Bill Evans commented that, excluding the nearly ten per cent surge in February/March, this is the highest the Index has been since February 2011.
“Further evidence of the positive response to the rate cut can be found in the response of those folks with a mortgage with their confidence lifting by 7.4 per cent”, Mr Evans said.
“There was also a bounce in the outlook for housing with ‘time to buy a dwelling’ increasing by 3.7 per cent.
The interest rate cut also appears to have boosted confidence around family finances.
Confidence levels in ‘Family finances compared to a year ago’ surged by 13 per cent while ‘Family finances over the next 12 months’ were up by 9.7 per cent.
Mr Evans said that with rates at record lows and the 15 per cent fall in the Australian dollar since April, it is likely that the Reserve Bank Board will now “take a step back to assess developments”.
“We are not expecting a move in September however we have retained our view that there will be another cut at the Board's meeting on November”, he concluded.