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ANZ-Roy Morgan Consumer Confidence fell 4 points to 93.2 in March over February.
Anything under 100 points indicated pessimism.
ANZ chief economist Sharon Zollner said consumers' perception about their finances fell 9 points to a negative-21 percent.
Only 16 percent expected to be better off this time next year, which was down 5 points.
And more bad news for retailers, with a net 16 percent of consumers thinking it was a bad time to buy a major household item.
Zollner said people with mortgages were now meaningfully keener to spend than those without, which was very unusual.
"Retailers will be hoping that that indicates some pent-up demand. However, a significant improvement is needed before the 'good time to buy' indicator will be pointing to good times for the retail sector," she said.
Zollner said household inflation expectations also rose last month, despite a drop in petrol prices.
"Retailers are telling us things are less dire, and our card spending data concurs, but it's clearly still tough times out there.
"Until the labour market and housing market turn definitively higher, consumers are likely to remain in a cautious mood".
