Consumer confidence back in positive territory (and why it matters for investors)

It appears Australian consumers are finally feeling a little more optimistic. According to the latest Westpac-Melbourne Institute survey, confidence jumped 12.8 per cent in November to 103.8 points, marking the first time it has risen above 100 since early 2022.

That threshold is important because it means there are now more optimists than pessimists for the first time in almost four years.

This shift in sentiment matters for property. Confidence is one of those forces that can really move markets, affecting whether buyers are willing to make big decisions, whether sellers feel pressure to drop prices and whether investors choose to hold or exit the market.

After years of uncertainty and doomsday headlines (mostly thanks to COVID), this is a welcomed statistic for the economy.

A lift in mood

I’m sure many would take this analysis as surprising. Westpac’s chief economist Bill Evans agrees, describing the result as “a surprisingly strong bounce,” pointing to improved expectations for family finances, employment and economic conditions over the next year.

So, it appears the most recent RBA announcement, which saw the cash rate remain unchanged, hasn’t impacted consumer confidence as much as pundits would’ve guessed. It shows other factors are adding to the optimism of Australians, like the de-escalation of China-US trade tensions and Australia’s recent supply of critical minerals and resources to the US.

It follows a long stretch where sentiment ran along recession levels. The ANZ-Roy Morgan weekly confidence index, for instance, averaged just 86.6 over 2025 compared with a long-term norm above 105.

Put simply, Australians are feeling more secure about their jobs and slightly less anxious about their cost of living. Even though interest rates remain higher than most would like, and most would agree a loaf of sourdough or pint of beer is getting outrageously pricey, the broader sentiment for everyday goods has apparently improved.

Why confidence drives property markets

When households feel pessimistic, they wait. But when they’re optimistic, they tend to act. They pull money out of savings, they buy, they upgrade, invest, and they build.

The difference between the two can be what determines whether listings sell quickly or rack up days on market, and whether prices climb steadily or stall.

With the property market across the country hitting extraordinary levels, this uplift in consumer mood will perhaps only heighten the temperature for those looking to secure a home or investment property while property prices continue to escalate.

The challenges still exist — and still matter

None of this means the challenges have disappeared. Inflation remains sticky, household debt is high and rate cuts are not guaranteed. The Reserve Bank continues to walk a fine line between cooling prices and avoiding a policy mistake that stifles growth.

If global conditions worsen or unemployment rises sharply, confidence could retreat just as quickly as it arrived.

However, those risks are now widely understood. It’s the unknown unknowns that could cause trouble.

The important change is that Australians appear to have adapted. Households have learned to budget, lower interest rates and refinancing offers have eased repayment pressures and wage growth is perhaps offering some breathing room for those with a mortgage. If these elements continue to hold true, the move back to positive consumer confidence might look less like a temporary headline and more like a lasting sentiment.

But will this confidence last?

The next few months will reveal whether this renewed optimism is fleeting or long-lasting. After all, 35 per cent of respondents in a recent survey for the Westpac–Melbourne Institute Mortgage Rate Expectations Index plan to spend less on Christmas gifts in 2025 than they did last year.

Regardless, after years of headlines warning of market crashes and housing affordability crises, it’s refreshing to see a positive story like this. The underlying challenges remain, but sentiment counts for a lot. When Australians feel hopeful about their financial future, the rest — from property prices uptick to retail profitability—tends to follow.

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