Australian consumer confidence drops in June
Sydney (9 June)
Australian consumer confidence fell by 2.9% on the month in early June, likely because of cost-of-living challenges, data from the Westpac-Melbourne Institute Consumer Sentiment Index (WMI) report show.
Consumers’ 12-month forward personal financial expectations dropped by 8.5% on the month in June, despite their forward economic expectations rising by 4.9% over the same period, WMI data released on 9 June show.
Australian consumers’ rosy view of economic conditions may be justified. Business confidence, future orders, and capital spending rose on the month in May, data from NAB’s Monthly Business Survey show.
“[Business] conditions have eased since early 2026 but remain positive, and they are not as weak as confidence suggested a month ago. That supports the view that economic growth has slowed since late 2025 but is still moving,” NAB Head of Australian Economics Gareth Spence said on 9 June.
But consumer inflation expectations may be justified too. Australia’s annual consumer inflation rate reached 4.2% in April, down from 4.6% in March, data from the Australian Bureau of Statistics (ABS) show. The Reserve Bank of Australia (RBA) expects annual consumer inflation to peak at 4.8% in June 2026, under its baseline forecast, it said on 5 May.
Consumers’ house price expectations also fell 1.8% in early June, potentially because of state and Federal Budget announcements from late April, WMI data show.
The Australian Government will end negative gearing for existing houses bought after 12 May from the 2027-28 financial year to 30 June to encourage investment in new builds, it announced in its 2026-27 Budget.
The Government has also announced plans to change the country’s capital gains regime to support investment in productive assets.
Australia’s planned tax changes are expected to create 75,000 first-home buyers and curb annual house price growth by around 2% for a few years, according to Treasury. But they are also expected to increase median rents by under A$2/week and curb dwelling construction by 35,000 units over a decade.
On a state-level, Western Australia’s government has partnered with the Federal Government to invest A$2 billion into housing and housing-related infrastructure projects, it said on 3 May.
The jointly funded projects will support 34,000 new dwellings – including 11,000 units for first home buyers – and water and power infrastructure. WA’s government expects developers to deliver new dwellings linked to the projects from 2027, it said.
By Avinash Govind