FILE PHOTO: Shops available for lease are seen in an empty shopping arcade on the first day of a five-day lockdown implemented in the state of Victoria in response to the coronavirus disease (COVID-19) outbreak in Melbourne, Australia, February 13, 2021. REUTERS/Sandra Sanders/File Photo

A measure of Australian consumer sentiment fell for a second month in June as a coronavirus lockdown in Victoria state darkened the mood despite signs of strength across the economy.

The Westpac-Melbourne Institute index of consumer sentiment released on Wednesday fell 5.2% in June, on top of a 4.8% drop the month before.

That left the index up 14.5% on June last year when the country was emerging from a round of nationwide lockdowns. The index reading of 107.2 showed optimists still outnumbered pessimists, although the margin was narrowing.

"The latest fall in June is almost certainly due to concerns around the two-week lockdown in Melbourne," said Westpac chief economist Bill Evans. "The survey was conducted during the first week of the lockdown."

Victorian authorities are expected to soon announce a relaxation of restrictions in Melbourne with only one case of locally transmitted COVID-19 reported for Tuesday.

While sentiment fell a sharp 7.5% in Victoria, New South Wales fared better with a drop of only 1.1%.

The drop in the overall index came across all components, with the measure of family finances compared with a year ago down 8.5% and that for finances over the next 12 months falling 2.0%.

The outlook for the economy over the next 12 months dropped 10.3%, while that for the next five years fell 1.4%.

The measure of whether it was a good time to buy a major household item fell 4.1%.

The housing market remained a hot topic with the survey's index of house price expectations at an historically high 157, but intentions to buy falling sharply as affordability suffered.

“Surging prices and rapidly deteriorating affordability are clearly starting to weigh heavily on buyers, suggesting owner occupier activity, particularly first home buyers, is likely to fade,” said Evans.

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