Australians are experiencing a reduction in consumer stress, which has reached its lowest point in two years due to easing cost-of-living pressures and optimism surrounding interest rates. The National Australia Bank's (NAB) latest Consumer Sentiment Survey indicates that the stress index fell to 56.6, down from 59.6 in March, which is below the long-term average.
NAB Executive Lucia La Bella highlighted the impact of recent rate cuts on financial sentiment. "We’re seeing a sense of optimism about the future and more confidence that there’s light at the end of the tunnel," she stated. La Bella also noted that almost half of mortgage holders report feeling relief from these rate cuts.
With an upcoming Reserve Bank of Australia meeting, households are closely monitoring potential changes and adjusting their budgets accordingly. Although cost-of-living concerns persist as the main issue for Australians, they have decreased to their lowest level in three years.
Households continue to economize by reducing spending on dining out, entertainment, and travel, saving an average of $4,860 annually. Additionally, consumers are adopting smarter shopping habits by switching to cheaper brands, researching purchases beforehand, and taking advantage of deals.
"They’re showing resilience, making smart choices, and setting themselves up for a stronger financial future," said La Bella.
The beginning of a new financial year presents an opportunity for individuals to revise their budgets with resources like NAB's Budget Planner offering guidance.
NAB's consumer stress measure considers factors such as job security, health concerns, retirement funding ability, cost-of-living issues, and government policy impacts. NAB Economics predicts three further 25 basis point cuts in 2025, aiming to bring the cash rate back to a neutral level of 3.1%. The survey collected data from 2,000 participants.
For further information:
NAB Media: +61 (0) 3 7035 5015