Roy Morgan Update July 22, 2025: Consumer Confidence, Inflation Expectations and Mortgage Stress

In this week's Market Research Update, we present the latest data on Consumer Confidence, Inflation Expectations and Mortgage Stress

Welcome to the Roy Morgan Weekly update.

Prime Minister Anthony Albanese has travelled to Australia’s largest trading partner China over the last week and today Federal Parliament sits for the first time since the Federal Election over two months ago.

Looking at the key weekly indicators shows Consumer Confidence virtually unchanged this week at 86.3, steadying after the previous week’s drop.

There was weakness this week in the two key personal finances indicators with fewer Australians expecting to be ‘better off’ financially this time next year.

However, this softness was matched by more confidence about the Australian economy over the next year and next five years.

Looking longer-term, Consumer Confidence remains stuck and has been below 90 for 164 weeks stretching back to May 2022 – over three years ago – a record long run below that level.

In better news, ANZ-Roy Morgan Inflation Expectations dropped 0.2% to 4.7% - the equal lowest for over two months.

This means Australians now expect inflation of 4.7% over each of the next two years. Inflation Expectations are now just below the average of the last 15 years of 4.8%.

As we often say when Australians think about inflation, the price of petrol is a very visible cue.

Average petrol prices dropped by over 8 cents per litre this week to $1.77 litre. This was the biggest weekly fall in petrol prices for nearly a year since August 2024.

However, despite the fall, petrol prices have now spent a record 148 weeks – nearly three years – above $1.70 per litre – the longest stint on record at such a high price.

And now to Mortgage Stress.

The latest Roy Morgan estimates mortgage stress increased in June, up 1.5% to 28.4% of all Australians with a mortgage, ‘At Risk’ of mortgage stress – an estimated 1.49 million Australians.

This is still lower than the highest levels of 2023 and 2024.

A deeper analysis by the States shows – probably to no one’s surprise – that mortgage stress is highest in New South Wales at nearly a third of mortgage holders.

The most recent ABS average dwelling price estimates show the average cost of a dwelling now exceeds $1 million – and this is entirely due to New South Wales with an average price in that state of around $1.25 million.

The Reserve Bank’s decision to leave interest rates unchanged in July disappointed many mortgage holders, but the signals are that interest rate cuts are on the way.

If the Reserve Bank cuts rates in early August, and again in September – by 0.25% at both meetings – all other things being equal – mortgage stress will be reduced in the months ahead.

These two interest rate cuts would lower mortgage stress by 2.9% points to 25.5% of mortgage holders in Australia, or 1,336,000 – around 150,000 fewer people would be in Mortgage stress than there are now.

If this were to happen this would be the lowest level of Mortgage Stress for well over two years since February 2023.

However, the results for this month offer a cautionary tale.

As interest rates reduce, borrowers are able to access larger loans and to pay higher prices for homes than they were previously able to.

Although lowering interest rates does lead to lower mortgage stress in the short-term among existing mortgage holders – human behaviour being what it is, and market dynamics being what they are, the follow on impact of people taking out larger loans than before can lead to a further increase in mortgage stress soon after.

These are all considerations the Reserve Bank needs to take into account when deciding on whether to cut interest rates again in the months ahead.

And finally to Indonesia.

As many of you know Roy Morgan is the only research company that continuously surveys across Indonesia.

We’ve done this for over twenty years and the insights continue to fascinate me.

Today we look at early reactions by Indonesians on some key questions in the six months immediately following the inauguration of Indonesian President Prabowo – and the signs so far are good.

Indonesians were asked to agree, or disagree, with a series of statements.

When comparing the first six months of President Prabowo’s Presidency (October 2024 – March 2025) and the previous six months (April 2024 – September 2024) – the movement on these statements has clearly been in a positive direction.

A large majority of 79% of Indonesians agree that “The Government is doing a good job running the country” (up 7%).

Now over three-quarters, 76% agree that “Democracy is working in Indonesia” (up 3%).

However, there are still serious issues facing Indonesians and the new President – an increasing majority of Indonesians – 84% (up 3%) agree that “Corruption is one of the major problems facing the country.”