Consumer confidence rises with a vengeance
Six near-consecutive interest rate cuts and a sharemarket that has been climbing since December have broken the back of consumer gloom, propelling confidence to heights not seen for years.
The March Westpac-Melbourne Institute consumer sentiment survey recorded a reading of 110.5 on a scale where 100 means optimists merely balance pessimists.
It is the first time the index has breached 110 since December 2010.
On the all important question of whether now is a good time to buy a house, the confidence reading surged to a 3 year high of 144. An extraordinary 60 per cent of consumers surveyed believe now is a good time to buy a dwelling. Only 16 per cent think it is not.
"Sentiment about house purchases usually leads building approvals by around 12 months," ANZ economic analyst Savita Singh said. "This points to a recovery in dwelling investment."
Housing finance figures released on Wednesday showed a jump in approvals for investors of 4.4 per cent in January, offsetting a dip of 2 per cent in December.
Australians are also unusually keen to buy cars. An impressive 56 per cent of those surveyed thought now was a good time to buy a car, compared with only 14 per cent who disagreed.
"Consumers would have been buoyed by the positive run on markets," Westpac chief economist Bill Evans said.
Asked directly about whether the sharemarket was a wise place to hold savings, 8.6 per cent felt it was, up from 5.4 per cent a year earlier. Asked about real estate, 21 per cent said it was a wise place for savings, up from 19 per cent.
The proportion believing "paying down debt" was the best use for savings slumped from 23 per cent to 18 per cent.
All but one of the questions asked by the Melbourne Institute recorded positive responses.
The index for Australians expecting better family finances in the year ahead climbed to 108 from 99 a year earlier.
The index for those expecting a better economy in the year ahead climbed from 89 to 110.
The index for Australians expecting better conditions over the next five years climbed from 93 to 107.