<?xml version="1.0" encoding="ISO-8859-1"?> <docID>340101</docID> <postdate>2025-03-11 14:14:13</postdate> <headline>Consumer confidence surges on back of interest rate cut but…</headline> <body><p><img class="size-full wp-image-332441" src="https://citynews.com.au/wp-content/uploads/2024/11/IMG_7872-resized-e1730690760929.jpg" alt="" width="900" height="600" /></p> <caption>Slowing inflation and good news on interest rates drove the bounce in consumer sentiment following a slowdown in recovery over the Christmas-New Year period.</caption> <p><span class="kicker-line">By <strong>Jacob Shteyman</strong> in Canberra</span></p> <p><strong>The Reserve Bank's first rate cut since 2020 has delivered a welcome boost to the economic outlook, but Australian consumers are still more pessimistic than optimistic.</strong></p> <p>The Westpac-Melbourne Institute consumer confidence survey posted a strong four per cent gain in March, up to a three-year high of 95.9.</p> <p>Slowing inflation and good news on interest rates drove the bounce in sentiment following a slowdown in recovery over the Christmas-New Year period, said Westpac's head of Australian macro-forecasting, Matthew Hassan.</p> <p>"The RBA's decision to cut interest rates in February and a further easing in cost-of-living pressures have provided a clear lift," Mr Hassan said on Tuesday.</p> <p>"The survey detail shows a broad-based improvement with a notable rise in confidence around the labour market outlook."</p> <p>Mortgage holders recorded the largest jump in confidence, while the outlook also improved for people planning to buy a home.</p> <p>Expectations of the time it takes to buy a dwelling eased, although expectations that house prices would rise also grew.</p> <p>It came as the Australian Bureau of Statistics revealed the value of Australian homes rose to a fresh record high, although the rate of growth was slowing.</p> <p>The value of Australia's 11.3 million residential dwellings rose 0.2 per cent to $11 trillion in the December quarter, despite a short slowdown in the housing market.</p> <p>"The relatively flat growth for the December quarter was the result of net additions to stock offsetting a slight fall in property prices," said ABS head of finance statistics Mish Tan.</p> <p>"Annually, growth slowed to 4.4 per cent from 8.1 per cent in December quarter 2023."</p> <p>Another four per cent improvement in April would bring the Westpac-Melbourne Institute consumer sentiment index back to 100, which would denote an equal amount of optimists as pessimists.</p> <p>But concerns still persist, most notably in the form of unsettling news from overseas.</p> <p>"While it is not the most pressing concern, the US 'tariff war' and deteriorating relations with some of its allies is clearly unsettling," Mr Hassan said.</p> <p>Ex-tropical cyclone Alfred is also weighing on the mood of some consumers.</p> <p>Brisbane defied the rising national trend to record a 1.7 per cent decline in sentiment.</p> <p>Meanwhile, business confidence declined into negative territory in February, according to NAB's business survey.</p> <p>That came despite a boost in profitability and trading.</p> <p>Conditions improved the strongest in mining and construction, while the wholesale, manufacturing, finance, property and retail industries suffered a decline.</p> <p>"Activity measures in the survey continue to point to below average growth," said NAB chief economist Alan Oster.</p> <p>"Cost pressures are a step above output price growth pointing to the ongoing challenges in the business sector even though economic activity showed some improvement in H2 2024."</p> </body>