Canstar’s sixth annual Consumer Pulse Report, which is based on survey responses from 2,157 adults, found that “close to two-fifths (39%) of homeowners and more than one-quarter (27%) of investors are not prepared” for further interest rate increases in 2023.
The Consumer Pulse Report found that average owner-occupier mortgage rates had risen 1.5% since April this year, from 2.9% to 4.4% as at November. For investors, mortgage rates had risen by an average of 1.2% since April to 4.2% by November.
Both cohorts understood that the full impact of the Reserve Bank of Australia’s 3.0% of monetary tightening (including December’s 0.25% increase) had yet to flow through to their loan repayments.
The majority of these respondents “indicated they would need to cut their living costs further to make ends meet” should interest rates rise further:
Australian renters are under even more stress according to the Consumer Pulse Report.
Concern about rising stress was last on the list of concerns in 2019’s report, with just 1% of respondents rating rental costs as their number one concern.
However, following double digit rent rises in 2022, rising rents rank as the second biggest money worry for 2023, with 11% of respondents rating it their number one concern.
“Rents skyrocketed this year as migration rose and housing stock levels tightened”, the report notes. “CoreLogic reported the annual growth in national dwelling rents broke into double digits for the first time on record in August 2022 and held steady at 10% over the 12 months to September”.
The situation has worsened since, with annual rental growth accelerating further to 10.2% in November, according to CoreLogic:
Whether you are a homeowner with a mortgage or a renter, 2023 is shaping up to be a grim year.
