For mortgage brokers, the most significant story in this week's sentiment data is not the headline recovery — it's who is being left out of it.
ANZ-Roy Morgan Consumer Confidence rose 2.1 points to 72.8 in the week of 15–21 June — its highest reading since early March — driven largely by a surge in buying intentions ahead of end-of-financial-year sales, with the “good time to buy a major household item” subindex recording its sixth consecutive weekly rise. Despite the improvement, the index remains well below the neutral level of 100 and has averaged just 67.5 over the past 17 weeks — a level of sustained pessimism the index has rarely recorded in its 50-year history.
The latest data reveals a sharp divergence between housing cohorts. Across the housing cohorts, mortgage holders were the only cohort to record a decline in confidence. This likely reflects the RBA's decision to hold the cash rate at 4.35% last week, with the Monetary Policy Board retaining the option to hike rates should inflation prove more persistent.
Renters, by contrast, recorded their highest confidence since late February. Outright homeowners remain the most confident group. The gap between borrowers and other cohorts has widened materially since the rate hiking cycle began, with borrowing capacity and serviceability pressures weighing on existing borrowers most directly exposed to the RBA's decisions.
The hold decision — widely interpreted as a pause rather than a peak — is doing little to reassure this cohort, with the prospect of a further rise still live depending on what the August data shows.
Alongside the confidence data, ANZ-Roy Morgan Inflation Expectations fell 0.2 points to 5.8% in the same week — the lowest reading since early March and down sharply from the record high of 7.3% reached in late March at the height of the Middle East conflict.
Inflation Expectations for the month of May were at 6.3% (down 0.7% points from a month ago), and the latest weekly rating is now 5.8% in late June — down 1.5% points from the peak in late March.
The driver of the recent improvement is largely mechanical. Petrol prices have fallen sharply since the government halved the fuel excise in late March, with average retail prices sitting at $1.66 per litre in late June — down more than 85 cents from the March peak. Roy Morgan's analysis flags a significant risk ahead: the cut to the fuel excise is set to be partly wound back at the end of June and ended fully by early August — which will lead to higher petrol prices in the weeks and months ahead.
If the excise reversal pushes inflation expectations back above 6%, the August board meeting becomes significantly more live — and with it, the prospect of further mortgage stress.
According to Roy Morgan's latest mortgage stress estimates, 29% of Australians with a mortgage are currently at risk — approximately 1.54 million borrowers — a figure that would rise with any further rate increase.
The stress data tells one side of the story. Renter confidence is now at its highest level since late February, prior to the escalation of conflict in the Middle East — a quiet signal that affordability-driven demand from renters looking to purchase their first property may be building, even as existing borrowers face continued pressure.
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