That's according to both the latest ANZ-Roy Morgan Australian Consumer Confidence index and Commonwealth Bank Household Spending Intentions (HSI) data for April.
According to ANZ-Roy Morgan's data, consumer confidence increased 0.8% last week, due to both the warm response to the Federal Budget (the most well-received in more than a decade) and a lack of local coronavirus cases.
"Consumer confidence increased by 0.8%, with sentiment in Sydney jumping 5.4% as no new community cases of COVID-19 were reported," ANZ Head of Australian Economics David Plank said.
"The greater than expected spending promised by the government in the federal budget may have also provided a boost to confidence.
"Among the detail, 45% of the responders said it is a ‘good time to buy a major household item’ versus 22% for it being a ‘bad time to buy’, which are respectively the highest and lowest values since February 2020."
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Special offer: Savings Accelerator (Kick Starter offer).
For a limited time, new ING customers can get a bonus 0.70% p.a. on their savings rate on balances of $150,000 up to $500,000 for the first 4 months. T&Cs apply.
If your balance is over $500,000 (but less than $5 million) you will earn the ongoing variable rate of 4.7%
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By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here. Rates correct as of November 21, 2024. View disclaimer.
The consumer confidence level of 112.5 is almost exactly the same as the rolling four-week average of 112.3, as well as the monthly average of 112.6 since 1990.
‘Time to buy a major household item’ gained 6.2%, ‘Current financial conditions’ rose 1.6%, while ‘future financial conditions’ expectations were up 0.1%.
These numbers are much higher compared to 12-months prior, when confidence and future expectations plunged to near-record lows at the beginning of the COVID crisis.
Home buying, entertainment spending intentions climb
A year on from April 2020's lockdown-induced lows, spending intentions across all seven categories tracked by Commonwealth Bank (CBA) showed "strong improvement, in a sign the economy advanced its recovery in April".
“This comes as no surprise as we know that April 2020 was the low-point for spending as the first wave of Covid-19 restrictions hit Australians,” said CBA Chief Economist Stephen Halmarick.
“A year later, the economy has recovered strongly from Covid-19 impacts, with employment above pre-pandemic levels and household spending intentions on the rise as consumers once again feel confident about their economic prospects."
The HSI series covers around 55% of Australia's total consumer spend across; retail, travel, education, entertainment, motor vehicles, and health and fitness.
In particular, home buying intentions continued to surge, as both loan applications and related Google searches increased.
Travel spending intentions "skyrocketed" compared to 12 months ago when almost all travel was halted, while entertainment spending in particular was also much higher at bars and pubs, restaurants, movie theatres, and live theatre.
According to Mr Halmarick, the increase in spending intentions across all of these was reflected in last week's budget.
“The Budget’s targeted support programs aim to put more people into jobs and ensure the economic recovery is widespread,” Mr Halmarick said.
“We expect the residential property market to be a key source of support for Australia’s economy in 2021, driven largely by the very low level of interest rates."
Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of November 21, 2024. View disclaimer.
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For home loans, the base criteria include a $400,000 loan amount over 30 years. For car loans, the base criteria include a $30,000 loan over 5 years. For personal loans, the base criteria include a $20,000 loan over 5 years. These rates are only examples and may not include all fees and charges.
*The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
Monthly repayment figures are estimates that exclude fees. These estimates are based on the advertised rates for the specified term and loan amount. Actual repayments will depend on your circumstances and interest rate changes.
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Harry O'Sullivan
Denise Raward
Harrison Astbury
