Roy Morgan Update January 16, 2024: ALP Support up to 51.5%, Consumer Confidence & Mortgage Stress

In this week's Update, we present the latest data on Primary Voting Intention, Consumer Confidence & Mortgage Stress.

Welcome to the Roy Morgan Weekly Update for mid-January- Lower inflation is good news for Labor.

• The ALP vote is up,
• inflation is down,
• Australians inflation expectations are down,
• Government confidence is up
• mortgage stress is down,
• and employment is up (unemployment is down)

The second Roy Morgan survey of the year shows support for the Government bouncing back strongly on the back of lower-than-expected official inflation figures. Support for the Labor Government increased 2.5% to 51.5% and is now clearly ahead of the Coalition on 48.5% on a two-party preferred basis - the ALP vote increased IN EVERY STATE.

This is still a close result and if an election were held today it would result in a hung Parliament with the balance of power held by independents and minor parties.

So the context for this turnaround?

Latest ABS Inflation (CPI) was 4.3%, that’s down 0.6% and the lowest for two years. This inflation result means further interest rate rises are now unlikely – a clear positive for the Albanese Government.

The other news of the week - that fell flat – was Opposition Leader Peter Dutton’s call to boycott Woolworths (Australia’s most trusted brand for 2023)  after the supermarket giant decided not to stock extensive Australia Day merchandise.

Dutton’s call failed to resonate with Australians as support for the Coalition fell on both primary and two-party preferred terms.

Roy Morgan Government Confidence, whether people think the country is going in the right direction or the wrong direction – improved this week – up 1pt to 81.5 – the highest since early November.

Still, a majority of Australians (53%) say the country is heading in the wrong direction and only 34.5% say the country is heading in the right direction.

This week ANZ-Roy Morgan Consumer Confidence was virtually unchanged at 84.4.

This week Inflation Expectations were down slightly by 0.2% points to 5.0%.

Australian Inflation Expectations are now clearly above the official figure of 4.3% for the year to November 2023.

Remember when inflation was on the increase, Australians’ inflation expectations seemed to be a lead indicator. Today it seems Australians’ concerns and lived experience of cost-of-living pressures are still strong – and they don’t yet feel we are over the worst of it.

Now, mortgage stress.

Roy Morgan is the only company that measures ‘mortgage stress’ every month and the latest ‘mortgage stress’ figures show a second straight monthly easing in mortgage stress.

By the end of November, 29.9%, of all mortgage holders were ‘At Risk’ of mortgage stress, an estimated 1,490,000 mortgage holders. Mortgage stress has now eased for two straight months.

In addition, 19.3% of mortgage holders were considered to be ‘Extremely At Risk’, equivalent to 934,000 mortgage holders, now down for three straight months.

The reduction in mortgage stress in November came despite the Reserve Bank raising official interest rates in early November to a 12-year high of 4.35%.

The easing of mortgage stress continues a trend seen in October and is a combination of several factors – increased household incomes, increased employment, reduced amounts borrowed and outstanding.

While banks are less likely to lend to those who might be ‘stretched’ people seem to be doing everything to reduce their mortgage; downsizing, selling other assets.

When home loan interest rates were low people used their home loans to fund what we might call the business of life – small businesses, trips, home improvements, school fees, second and holiday homes etc. etc.

Home loans were a cheap form of financing. The increase in interest rates has encouraged people to think again about this kind of funding – and they’re making different choices.