CONSUMER confidence has finally rebounded in response to the deluge of good things being showered on households: cash handouts from the federal government, interest rate cuts from the Reserve Bank, and cheaper petrol from global oil markets.
But the rise in the Westpac-Melbourne Institute index of consumer sentiment was only modest, as it climbed back from 95.6 in June to 99.1 in July - still in negative territory, since 100 is neutral.
It was the best reading the index has delivered since February, and most of the bounce came in the ailing south-eastern states - NSW, Victoria and South Australia - even if all three remain predominantly negative in outlook.
But Westpac chief economist Bill Evans warned against seeing the rise as a turning point, cautioning that "much can happen, particularly in the international economy" to send it back down in coming months.
Analysis by Michael Chua of the Melbourne Institute reveals a gap as wide as the Nullarbor between Western Australia and the eastern states. Even in smoothed trend terms, the confidence index stands at 116.1 in Western Australia, but just 95.9 in NSW, the next most confident state.
New housing finance figures released by the Bureau of Statistics showed a similar story.
Most of the growth is due to homeowners refinancing existing loans, rather than making purchases. The number of mortgage loans being written is going sideways if refinancing deals are included, or falling back towards last year's lows if they are excluded.
But there is a sharp difference between home-lending activity in the resources states and in the south-east. In trend terms, the number of new loans (including refinancing) written in the resource states (Queensland, Western Australia and the Northern Territory) rose 17 per cent in the year to May - whereas in the south-east, it rose just 2 per cent.
Even in the west, however, the growth is mostly in refinancing. In the first five months of 2012, angry bank customers across Australia refinanced 81,973 home loans, up 21 per cent from the same months in 2011. NSW customers alone refinanced 25,034 loans, up 28 per cent, and those in Western Australia refinanced 12,279, up 40 per cent.
Loans to owner-occupiers to construct new homes have grown 4 per cent in the past year, in trend terms, while loans to buy existing real estate grew just 0.3 per cent.
BT chief economist Chris Caton noted that lending to investors to build new homes fell to the second lowest level in the past decade. "Lending for housing remains moribund," he said.
Westpac's Evans attributed most of the rise in consumer confidence to the Reserve Bank's interest rate cuts of May and June, noting that confidence among people with mortgages rose much more than among tenants or people who owned their homes outright.
He said the threat of a new crisis in Europe had been averted "at least for the time being", and noted petrol prices had fallen 13 per cent since May.
