Household financial confidence plummets to its lowest level

author-avatar By on May 10, 2019
Household financial confidence plummets to its lowest level

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A combination of falling property prices, stagnant wage growth, rising cost of living and increasing levels of debt have pushed household financial confidence to its lowest level, according to Digital Finance Analytics (DFA).

DFA’s monthly survey of 52,000 households for its Household Finance Confidence Index found that confidence fell over April to its lowest level since the survey began in 2013.

The April index score of 85.9 follows March’s score of 86.1, the previous record low.

DFA’s findings correlate with those from NAB’s Consumer Anxiety Index, which found that the cost of living remains the biggest cause of consumer anxiety.

According to DFA’s findings, younger households are the most concerned about their finances compared to older, less leveraged households.

Confidence among all wealth segments declined – even those without a mortgage.

Principal Adviser at DFA, Martin North put this down to falling property prices, stagnant wage growth, rising cost of living, and mortgage pain.

Property investors were the most concerned, thanks to lower capital values, falling rental returns, switching from interest only to principal and interest, and fears surrounding changes to negative gearing.

Mr North said the findings of the survey are “quite significant” in the lead up to the May 18 election.

“In the context of the upcoming election we think this is quite significant because clearly household financial confidence is going to be a driver in many cases of people’s decisions when it comes to the ballot box,” he said.

Mr North said he “cannot see anything on the horizon to change this trajectory”.

“I can’t see anything that will turn this around. Quite frankly, even if Labor win the election, I don’t see that’s going to have a dramatic impact. I think we’re in for a long, slow grind in the household confidence sector. And the question I have is, is this a reversal trend?”


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Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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