Matthew Hassan

More than one in three (35%) Gen Z Australians plan to buy their first home within five years, according to Westpac’s latest Home Ownership Report. Intentions have jumped five percentage points since January 2025, signalling a wave of growing confidence despite ongoing affordability challenges.

The renewed optimism among Gen Z is being driven by wanting to feel more financially secure (34%), up three per cent on January figures, and a desire for independence (37%). Just over one third (32%) of Gen Z buyers are motivated by not wanting to rent forever.

“Gen Z are leaning in despite higher hurdles,” said James Hutton, Westpac Managing Director, Mortgages.

“They’re maintaining flexibility in their plans, considering available support, and signalling they won’t stay renters forever. That upswing matters for supply and affordability conversations in Australia over the coming years.”

The drive to buy sooner is driving flexibility, with 80 per cent of all first home buyers open to purchasing in suburbs they hadn’t previously considered, and another 80 per cent actively changing their lifestyles – cutting back on non-essentials like food delivery to boost savings.

Gen Z buyers are also reshaping their property expectations. Interest in buying a house has slipped three percentage points since January, while plans to purchase an apartment have risen by two per cent. More than half of Gen Z buyers (55%) are even considering rent-vesting – a strategy that’s held in popularity since January.

According to the research, deposit hurdles remain for many. While most first home buyers aim for a 17.5 per cent deposit, nearly a third are targeting ten per cent. For Gen Z buyers, 53 per cent are moving ahead with plans for a deposit of 10 per cent or less of the purchase price.

“Demand from younger buyers is picking up, and the expanded government guarantee is likely to fast‑track purchase decisions,” said Westpac Senior Economist Matthew Hassan. “Affordability and supply remain big challenges for buyers. Listings are scarce, forcing many to broaden their search to new areas and property types. Addressing entrenched undersupply is a priority for governments, but material improvement is going to take time.”

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Matthew Hassan

The Westpac-Melbourne Institute Consumer Sentiment Index fell 6% in April, to 90.1 from 95.9 in March.

Matthew Hassan, Westpac Head of Australian Macro-Forecasting, said: “Consumers are showing deepening unease about developments abroad.

“Sentiment weakened sharply over the course of the survey week, with steep falls following the ‘reciprocal tariffs’ announced by US President Trump on April 2.

“Those surveyed before the announcement reported an index read of 93.9 down only slightly from March’s 95.9. Those surveyed after the announcement reported an index read of just 86.6, down nearly 10% compared to March.

“The scale and breadth of tariff increases, which included a 10% tariff on Australian goods, came as a major surprise, triggering a sell-off in global financial markets.

“With the situation still deteriorating, there is a clear risk of more significant sentiment declines in the months ahead.”

Read the report.

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Matthew Hassan

The Westpac–Melbourne Institute Consumer Sentiment Index rose 2.8% to 85 in August from 82.7 in July.

Westpac Senior Economist Matthew Hassan said: “Consumers breathed a small sigh of relief in August as the RBA Board left interest rates unchanged and the support coming from tax cuts and other fiscal measures became more apparent. That said, the Index remains at weak levels by historical standards, stuck in the 78–86 range that has prevailed for over two years now. The survey detail shows that cost of living and rate rise concerns are still weighing heavily.

“The component indexes show a clear improvement in the latest sentiment data, centred around family finances.

“The ‘family finances vs a year ago’ sub-index surged 11.7% in August, the biggest monthly gain in nine years (excluding the COVID period) lifting the sub-index to 70.9 – a two-year high, albeit still a very weak level overall. The monthly rise was particularly strong amongst low-income earners; 18–34 year olds and those aged over 65; and in South Australia, Queensland and Victoria.

“Consumer expectations for their finances also improved, with the ‘family finances, next 12 months’ sub-index rising 5.1% to 96.8. This is the highest level since the interest rate tightening cycle began in May 2022.

“While these monthly moves are impressive, both ‘family finances’ sub-indexes were coming off sizeable declines and extremely weak levels in July. Even with these gains, the August reads on both sub-indexes were still in the bottom 15% of monthly readings since the series began in the mid-1970s.”

Read the report.

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Matthew Hassan

The Westpac Melbourne Institute Consumer Sentiment Index rose 6.2% to 86 in February, from 81 in January.

This is the biggest monthly gain since April last year, when the RBA paused its rapid series of interest rate rises, and takes the Index to its highest level since June 2022.

Westpac Senior Economist Matthew Hassan said: “While sentiment is still firmly pessimistic, there finally looks to be some light at the end of the tunnel for Australian consumers. Moderating inflation and shifting expectations for interest rates appear to be the main factors behind the lift, with some additional support coming from the prospect of broader income tax cuts later in the year. That said, responses over the course of the survey week suggest the rally is still very tentative with a sharp pull-back amongst those surveyed after the RBA’s February policy decision.

“All five component sub-indexes recorded gains in February, led by big improvements in buyer sentiment and expectations for the economy over the year ahead.

“The ‘time to buy a major household item’ sub-index surged 11.3% to 86.8. This sub-index has been the main one to capture the impact of intense cost-of-living pressures over the last two years, with six of the weakest monthly reads on record. While the sub-index remains a long way below its historical average of 124.7, the February gain is the most promising sign yet that these pressures are finally starting to ease.”

Read the report.

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Matthew Hassan

The Westpac-Melbourne Institute Index of Consumer Sentiment rose 2.9% to 82 in October, up from 79.7 in September.

Westpac Senior Economist Matthew Hassan said: “The consumer mood has improved slightly but optimism remains in extremely short supply. At 82, the latest Index read is still in deeply pessimistic territory, consistent with a continuation of the contraction in per capita spending seen since late last year. While there are some faint glimmers of hope around family finances and the outlook for jobs, these are being overshadowed by still-high inflation and renewed rate rise concerns.

“The RBA’s extended pause on rate hikes continues to see only a muted lift in sentiment. The headline Index is up only 3.7% since the last rate rise in June, and sentiment amongst households with a mortgage is only up 5.9%.

“Consumers remain wary of the potential for more rises in the months ahead. Amongst those surveyed after the October RBA decision, 63% still expect mortgage interest rates to rise over the next year, up sharply from 48% in September (albeit below the 70-80% reads seen when the RBA was actively hiking). Only 7% of consumers expect rates to be cut over the next year, down from 15% in September.

“Some of the increase in this expectation likely relates to the surprise jump in the monthly CPI indicator, which showed annual inflation moving back above 5% in August. However, the detailed survey responses point to a slightly more nuanced picture here. Across sub-groups, the latest increase in interest rate expectations has been driven by freehold homeowners and older households rather than households with a mortgage. As such, it may be more about hopes of improved returns for the ‘deposit belt’ than fears of further rate hikes for the ‘mortgage belt’.”

Read the report.

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