The renewed coronavirus lockdown in Melbourne has wiped out a month of gains in consumer confidence.

The latest Westpac-Melbourne Institute consumer sentiment index shows a 6.1 per cent fall between June and July.

The sharp decline shows just how quickly the public mood can turn, retail analyst Jason Ireland says.

“The headwinds that had lessened up a little bit last month are back,” he told AAP on Wednesday.

The survey was taken during the week the Melbourne lockdowns were announced but just before the discovery of a cluster of cases linked to a Sydney pub.


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Sentiment plunged by more than 10 per cent in Victoria while across the rest of the country, it dropped on average by 4.5 per cent.

Mr Ireland said that could indicate the size of the hit to confidence from lockdowns.

He anticipates there could be another blow next month, depending on how the Sydney virus outbreak plays out.

“If it results in this just being localised, for instance, then you would expect that we won’t have the same sort of hit that the Victorian shutdown has taken to that index,” the McGrathNicol partner said.

“What I took away from June was that you had a consumer that was quite motivated – on signs of positivity, they want to come back into the market and spend.”

Meanwhile, the latest Australian Bureau of Statistics data shows new housing construction was 12.7 per cent lower in the March quarter than a year ago.

The total value of construction in the first three months of the year was down 1.1 per cent compared with the December quarter and 5.5 per cent on the previous year.

While new home builds plummeted, renovations actually increased by 1.8 per cent on the same time in 2019.

The figures pre-date the government’s HomeBuilder scheme, which will give a $25,000 grant to people who sign a building contract for a new house or significant renovation before the end of the year.