Consumer sentiment has risen despite banks increasing rates on interest-only mortgages, but pessimists still outnumber optimists.
The latest Westpac-Melbourne Institute Index of consumer sentiment has risen 0.4 per cent to 96.6 in July, compared to 96.2 in June.
Westpac's chief economist Bill Evans said it was the eighth consecutive month for the index to print below 100, which means the pessimists outnumber the optimists.
However, he said the lift in the index was a good sign considering the out-of-cycle interest rate rises by the banks.
"Developments around interest rates during the month could have been much more damaging for confidence than what turned out to be the case," Mr Evans said.
"Banks increased rates on 'interest only' mortgages while there was considerable media speculation about prospects for rising rates overall (in July)."
He said confidence among survey participants with mortgages actually rose 4.8 per cent, while people aged 55 and over who have higher exposure to investor housing recorded a 10 per cent drop in confidence for the month.
Westpac continues to expect the Reserve Bank will keep the cash rate at a record low of 1.5 per cent for the remainder of 2017 due to a slowing housing market, cautious consumers and a weakening jobs market with slow wages growth.
The index is based on a telephone survey of 1200 adults across Australia during the week from July 3.
Share
