Soaring interest rates, cost-of-living pressures and global uncertainty are driving down consumer confidence in WA, according to CCIWA’s quarterly Consumer Confidence report.
Although inflation is declining, it remains well above target – exerting “relentless pressure” on household budgets, the report says.
More than three-quarters of respondents say higher cost of living has dented their confidence, while 64% say interest rate increases weighed on their confidence.
CCIWA Chief Economist Aaron Morey says although shorter and longer-term confidence is down this quarter, it is higher than six months ago.
“WA’s strong jobs market continues to prop up confidence with around two in five (40%) indicating that their employment prospects are positive,” he says.
Nearly half of those surveyed say they have dipped into their savings to cover the rising cost of living.
“The average amount of money West Australians have in savings has increased by $10,800 since the last quarter, sitting at just over $65,800,” Morey says.
“But the median savings value in WA has continued its downward trajectory, currently sitting at $4,000. This has dropped by $1,000 since June and $2,000 since December 2022.”
Morey says the impact of future interest rate increases will continue to flow through to a greater number of households in the next year, as a significant number refinance their loans.
“30% of current mortgage holders said they would need to refinance their home loans in the next 12 months, and the vast majority of those (76%) said they would select a loan that is either part variable, part fixed or variable,” he says.
“Only 24% said they would choose a fully fixed rate.”