A key measure of Australian consumer confidence fell slightly in April, as households took two straight interest rate hikes in stride and remained remarkably optimistic about jobs and house prices. The survey of 1,200 people by Westpac Bank and the Melbourne Institute released on Wednesday showed its index of consumer sentiment fell 1.0 percent in April to 116.1.
That left it 25.2 percent up on April last year, when the impact of the global financial crisis was still playing out. "Despite a second consecutive increase in the standard variable mortgage rate of 0.25 percent in April, the index has hardly moved." The rise in mortgage rates came after the Reserve Bank of Australia (RBA) lifted interest rates to 4.25 percent last week, bringing its total tightening since October to 125 basis points. Mortgage rates have risen even further, building pressure on Australia's indebted households.
Wednesday's survey was taken over the weekend following last week's back-to-back monthly 25 basis point hike, suggesting the level of rates were yet to weigh on confidence. Australian home prices have been rising steadily for months and one closely watched measure hit record highs in February. The jobless rate has been steady at 5.3 percent, with over 200,000 jobs being added since August last year.