Consumer sentiment dips
Westpac released its consumer sentiment survey, which showed the consumer sentiment index leaking -2.6 points to a reading of 90.5 in February 2026, in response to this month's hawkish interest rate hike.
The time to buy a dwelling index pulled back quite sharply and is -4.4 per cent from a year earlier.
On the other hand, house price expectations continue to rise in the face of the worsening dwelling shortage, up another +3.9 points to a reading of 173.9, a massive +22.2 per cent increase from a year earlier and a new 15-year high.
Source: Westpac
The AFR reported today that the Housing Australia Future Fund has achieved just 2 per cent of its total target, with almost no new dwelling supply added over the past two years, while the interest rate hike this month will do little for developer sentiment or to speed up the delivery of new housing.
Business survey latest
The business surveys are arguably the best real-time indicator of what's going on in the economy, and the NAB survey for February 2026 showed business conditions cooling a little (-3 index points to a reading of 7).
Anecdotally, speaking to people at markets and in services businesses, demand seems to have dropped away quite sharply this year, as schools go back and perhaps as consumers adjust their expectations for mortgage rates.
Most optimistically for the central bank, there was a notable cooling in price pressures evident in today's survey, across retail prices, purchase costs, and labour costs.
Westpac's chart below how costs and out prices spiked alarmingly through until 2022 after the international borders had reopened and businesses grappled with labour and supply shortages.
Now, however, the quarterly growth across all measures of costs and prices has fallen to below the long-run average levels.
Source: Westpac
Taken at face value this suggests that temporary factors have driven the recent inflation, and price pressures will prove to be transitory.
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