"Australian consumers are the most hawkish they've been on rates since Feb last year. The latest Westpac-Melbourne Institute Consumer Sentiment survey repeated an extra question added in Feb, Jun and Aug last year asking about expectations for mortgage rates over the next 12 months. It shows a rising consensus that more rate rises are on the way, although most expect a move of 0 to 1% over the year ahead rather than the 1%+ rise widely expected in Feb 2010...
Whatever the reason, consumers are clearly still bracing for higher rates. That said, the spread of responses in Feb points to an average expected rise of 77bps over the next year, slightly below the 80bps in Aug and the 86bps in Jun, reflecting the lower proportion expecting a 1%+ rise. That points to an expected standard variable mortgage rate of 8.6% by Feb next year, which would mark the second highest level since 1996, the highest being the peak recorded in 2008."
