Consumer Confidence And Sentiment - What Are The Major Banks Saying?

The RBA rate cuts of Feb and May may not deliver the spending shots in the arm that disappointed retailers were looking for. Earlier this month, the Big banks say just 1 in 10 borrowers lowered their repayments from the May cuts, opting to reduce their mortgages further instead of spending it. CBA said same occurred in Feb cut.

Are borrowers building a surplus (in their loans) for the next cost of living crisis? Be prudent?

ANZ saw 7% lower repayments in Feb, and 10% in May. Trend is slightly higher, but probably a lot lower than many expected. Customers most generally change their repayments the day after RBA cuts, followed by the date the rate change becomes effective.

The 10% that are reducing their repayments are mainly in their 30s-40s, which which we can understand given raising a family, cost of living, etc

Points to the resilience of borrowers to maintain high debt loads and repayments at current levels. Commentators recently said that borrowers have weathered the interest rate storm and cost of living pressures well. Borrowers got used to the higher repayments, they say, and may continue to maintain the high repayment levels of the pre-Feb cut. This could have adverse impacts on unemployment if spending remains generally curtailed. However, it should further smother inflation, leading to more rate cuts, which is likely positive for house prices as borrowing capacity improves and confidence grows.