The latest rise in interest rates has knocked consumer confidence around again across the ditch after showing some signs of optimism in recent months.
The Westpac and Melbourne Institute monthly consumer sentiment survey has picked up a sharp drop off in responses following the Reserve Bank's decision to lift interest rates by another 25 basis in November.
The index fell by 2.6% to 79.9 index points in November, down from 82 in October.
Westpac senior economist Matthew Hassan said the latest cash rate hike to 4.35% renewed pressure on family finances.
"Previous months had been showing some tentative signs that sentiment was starting to lift out of the deep pessimism that has prevailed since the middle of last year," he said.
"That rally looks to have been cut short before it even really began."
The fall was driven by a sharp deterioration in consumer expectations linked to family finances over the next year, which dropped 7.3%.
Mr Hassan said the responses pointed to another "penny-pinching" Christmas.
Nearly 40 per cent of consumers plan to spend less on gifts than last year, the survey found.
The weekly ANZ and Roy Morgan index also sunk, by 3.5 index points to 74.3.
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