Research undertaken by the Australian National University (ANU) highlights the impact of cost-of-living pressures on household budgets.
The ANU’s quarterly survey shows that about 30% of Australian adults find it difficult to get by on their current income.
Nearly 60% of the 4,200 respondents aged 18+ said they had spent less on groceries and other essential items in the last 12 months, while about 50% indicated that they had postponed a major purchase.
Meanwhile, about three in 10 respondents with a mortgage said they are finding it hard to make ends meet.
Not surprisingly, the survey showed that people aged 35 to 54 reported the highest rates of financial stress, followed by people younger than 35.
“These findings paint a challenging picture of the Australian economy, which has been battered by the pandemic and an inflation crisis in recent years”, survey author ANU professor Nicholas Biddle said.
This corresponds with spending and savings data from the CBA, which shows younger Australians are being hit hard:
The latest monthly CPI Inflation increase also showed that essentials continue to rise at an alarming pace.
For example, rents surged 7.6% in the year to July:
Whereas gas and electricity prices have experienced hyper-inflation over recent years:
Meanwhile, the latest cost-of-living survey from the ABS showed that mortgage interest payments almost doubled in the year to June:
The situation facing households will only get worse as thousands of pandemic fixed rate mortgages expire.
Only two-thirds of the RBA’s interest rate hikes have been felt by borrowers, according to the CBA.
But with a further $52 billion worth of fixed rate loans expiring over the second half of 2023, around 85% of the RBA’s rate hikes will be felt by borrowers by year’s end:
By mid 2024, once the pandemic fixed rate loans have expired, Australians will be paying their highest ever share of income on mortgage debt repayments:
Rents are also likely to continue rising swiftly owing to the Albanese Government’s record immigration drive.
It is a recipe for disaster and falling living standards, especially for younger Australians.
