Household financial confidence dives deeper into abyss

Digital Finance Analytics has released its Household Financial Confidence Index results for January, based on a survey of 52,000 households, which revealed that confidence has fallen to the lowest level in the survey’s five year history:

According to Martin North:

Looking at the results by property segments, we see a fall in confidence among property investors, as home prices and rental yields continue to fall, and reflecting concerns about potential changes to negative gearing and capital gains ahead. That said, purchase interest has risen a little. We will discuss this later.

Owner occupied borrowers are also feeling the heat, reflecting some mortgage price pain, as well as the basic affordability issues. Those renting however are a little more positive relatively speaking, thanks to rents being lower now and a greater choice of property for rent being available, especially in Sydney. Overall investors are the least confident now, a considerable switch from a year or so ago!…

The most significant fall was in NSW, as home prices fall – and the fall out from Opal Tower had an impact more broadly on new purchases, and off the plan commitments.

Across the age ranges we continue to see weakness, with younger households more exposed…

Those feeling more secure about their job prospects fell 2.19% to 10.57%, while those feeling less confident rose 4.84% to 33.85%…

Savings rates continue to fall for many, and others are raiding what savings they have to maintain their lifestyles…

Turning to debt, 1.11% of households are more comfortable than a year ago, and 52% are about the same. 46% are less comfortable than a year back…

Income growth remains a real concern for many households (in real terms many have seen falls in recent years). 3.88% of households reported their real incomes had grown in the past year, 51.99% said incomes had fallen in real terms, and 42.5% said there had been no change…

One of the killer categories is the costs of living… 87.75% said their costs had risen over the past year, up 3.2%…

That’s a bearish set of numbers.

Full report here.


  1. Don’t worry, mass immigration and cashed up foreign investors are going to show up and make the last bubble run look like a conservative shop for specials Aldi. No sweat. All will be well.

    • Did I mention people are going to be keenly borrowing at 16x income with support from the government?

      Oh, and UBank still has loans at 2.15%. Endless debt for the win – always has been, always will be infinitely sustainable. Soft landings everywhere thanks to endless easy credit.

      • Sorry, did I say 2.15? I meant 1.15%. Also the government will soon let us take out all of our super and match it dollar for dollar providing we spend the cash on buying property.

    • You’re kind of hitting on the whole confidence fairytale that we seem to have bought into, particularly since the GFC. If as individuals and as a nation we somehow maintain our confidence all will be well because we’ll keep spending and borrowing and spending and borrowing and spending ad infinitum.

      At what point did Australia’s economic and business leadership adopt a mindset better left for getting laid to running a country?

      • I think you meant to say “because we’ll keep borrowing and spending and borrowing and spending and borrowing ad infinitum”.

  2. My confidence is sky high right now!

    The corporate regulator will ask the government to change mortgage rules that could make it harder and more expensive for borrowers to get a new home loan if it loses a landmark case against Westpac over responsible lending laws.

    Sources close to the Australian Securities and Investments Commission have confirmed the regulator would seek to enforce stricter rules on how banks assess the personal expenses of potential customers if its Federal Court action against Westpac fails.

  3. Jumping jack flash

    Here, have some more debt, that will fix thing.
    Interest rates through the floor!

    For an economy that is based fundamentally on creating debt and attaching it to houses, and not much else, infinite debt expansion means infinite economic expansion.
    30 years with no recession? Why not 60? Why not 160 years of continuous debt expansion? Its just debt and there’s plenty of that. Our houses are worth whatever we say they are worth, 10 million, 100 million, whatever we say. It’s just numbers.

    Prosperity, to infinity and beyond!

    How can people have forgotten that debt is commitment to pay from future earnings?
    Its not magical free money from wherever your deity of choice lives.

    It makes no sense. You can’t endlessly borrow money from the future, at some point the future has no money, and then there is no future.

    • Ive seen mortages go from 20 years ro 25 to now 30 as the default calculator. Then i have seen some refinance and push to 40-50 years. Some are generational loans. Grandparents move in with the kids who are married with a kid on the way, all chipping in on the mortgage.