December 18, 2025
Consumer confidence is wobbling again — what it means for borrowers
If you thought the hype around Black Friday had given Aussie households a little boost — think again. The latest ANZ-Roy Morgan weekly update shows consumer confidence has dipped. The headline index fell 2.0 points this week to 83.5. That’s lower than this time last year, and below the 2025 weekly average. Roy Morgan+1
What’s dragging sentiment down
Rental expenses fall into three main categories:
- The biggest hit came from the “time to buy a major household item” sub-index, which slumped 5.6 points. According to ANZ, that’s likely because Black Friday weekend is over — and with it, the urgency to spend. ANZ+1
- Confidence about the next 12 months? Also weaker. Expectations for personal finances slid further, reaching the lowest level since November 2023. ANZ+1
- Inflation expectations remain elevated: the four-week moving average is up to 5.5% — the highest since late 2023. That kind of persistent inflation tends to chip away at optimism and disposable income. ANZ+1
In short: people feel less sure about whether now is a good time to spend — and more uncertain about where their household budgets are going.
Why this matters to finance-broking clients
For customers thinking about taking on or refinancing home loans, or investing in property or home improvements, these shifts in confidence send several signals:
- Reduced spending appetite (for now): With the “good time to buy” indicator swinging down, fewer households may rush into new mortgages or renovation-driven loans — which could dampen demand for credit in the short term.
- Caution on future finances: Weaker sentiment about future household finances means many people might be more risk-averse, possibly holding off on big purchases or leveraging their homes.
- Interest rates remaining sticky: With inflation expectations still high, the outlook for the cash rate remains steady. As one economist noted, the data supports the idea that the Reserve Bank of Australia (RBA) is unlikely to rush into rate cuts soon. ANZ+1
Put simply: confidence — and willingness to borrow — may be softening just as more households weigh their budgets carefully.
But — it’s not all doom and gloom
It’s worth remembering that consumer confidence fluctuates. Just a couple of weeks ago (around the Black Friday lead-up), the index was up at 87.1 — its highest in months. That lift was largely driven by a surge in buying intent. Roy Morgan+1
That suggests many households were ready to spend — maybe for seasonal purchases or home improvements — but the post-sale lull has knocked the wind out of that boost.
Also: confidence indices tend to be somewhat reactive. Big swings around sales events, inflation scares or rate decisions are common. They reflect sentiment rather than hard spending data.
What to watch
You should factor in not just current rates, but also economic sentiment and inflation expectations. If your household feels pressured by cost-of-living, that might influence your borrowing capacity and repayments.
For clients considering renovations or upgrades, now might be a time to look at budgets and contingency — given the dip in “buy-now” confidence.
Keep an eye on consumer confidence trends and future inflation readings: if sentiment improves again — maybe after a rate cut or favourable CPI report — demand for credit or property might rebound.
•For investor clients, a softer consumer outlook could imply caution in retail-driven investments — but also potential opportunity if good assets become more attractively priced.