The recent out-of-cycle mortgage hikes by some of the biggest lenders have dampened the spirits of Australian households, according to a new survey.
Citing the latest poll by Westpac-MI, Business Insider Australia reported a 3% drop in consumer sentiment index, falling to 100.5 in September. While the index still registered above 100, this is the lowest sentiment reading since November last year.
Westpac chief economist Bill Evans said the drop in consumer sentiment was also driven by factors including political chaos and economic outlook.
The survey showed that the attitudes of Australians towards current and expected family finances have weakened, falling by 3.6% from August.
"Three of the four major banks recently lifted their standard variable mortgage rates by 14 to 16 basis points, with two of these moves announced during the survey week. The decline in sentiment around family finances is broadly comparable to responses seen following mortgage rate rises in the past," Evans said, as quoted by Business Insider Australia.
The survey recorded a significant plunge in the sentiments of households with a mortgage, down by 5.6%.
Evans noted that the slow growth in wages and the consistent housing price declines in Sydney and Melbourne are contributing to the dampening of consumer sentiment towards finances.
Even the sentiment on whether it is the right time to buy a home dropped to 4.8% while the outlook for prices took a 3% dive.
"Expectations have shown a particularly sharp fall in New South Wales, down 12.8% over the month and 40.6% from September last year. Most respondents in the state now believe home prices will fall in the year ahead, a mindset that could prove to be influential in the busy Spring season ahead," Evans said.