In a remarkable turnaround, consumers were found to be increasingly confident about exceeding normal spending levels this Christmas and under the category of “time to buy a dwelling” the index increased 8 per cent, the highest reading since 2013.

Queensland led the increases on the dwelling index with an 11.7 per cent jump and overall Australians are expecting a significant improvement in the economy over the next 12 months.

Westpac said the “time to buy” index was aligning with house price expectation index, which has increased 12 per cent and is now only 7.3 per cent below its level in March when the pandemic lockdowns started.

“Without doubt this survey is signalling a strong resurgence in the housing market,” Westpac chief economist Bill Evans said.

Significantly, the survey was done before the latest easing in restrictions in Victoria and before this week’s announcement by Pfizer of a vaccine for COVID-19.

A fulsome Prime Minister Scott Morrison told Parliament: “We’re bounding back from the terrible lows that we saw as we moved through the worst part of the COVID-19 recession.”

Morrison said the government’s own vaccine and health strategy is critical to Australia’s economic growth come back and success.

“We are leaving no stone unturned in ensuring the greatest Australian come back that this country has seen since the Great Depression,” he said.

However, not all the banks are as bullish as Westpac has been. Suncorp this week kept its forecast of a fall in house prices.

Evans said the record low interest rates was over-riding any concerns about high unemployment or the prospect that the Government may withdraw fiscal support.

“The main message from this survey is the encouraging optimism which is building around the outlook for the housing market,” Evans said.

There was good news for the battered retail sector in the survey with a jump in the spending expectations for Christmas.

Evans said that over the history of the survey, the proportion of people planning to spend more at Christmas minus the proportion planning to spend more has been -20.9 per cent with a high of -12.7 per cent in 2015.

The latest reading was -20.8, which was about the same as the long run average since 2009.

He said that showed many Australians were preparing for a “normal” Christmas spend.

The scaling back of JobKeeper may have had an impact of the family finances section of the survey which was down 3.2 per cent.

Australians were also expecting a deterioration in the job market, but the index is well down on where it was earlier in the year.

Other gauges of confidence released this week also indicated the country has got over the worst of the pandemic, prompting Prime Minister Scott Morrison to declare the economic comeback from recession has begun.

The weekly ANZ-Roy Morgan consumer confidence index has now risen for 10 weeks in a row, while National Australia Bank’s business confidence index is at its highest since mid-2019.