Baby boomers continue to drive inflation


CBA’s April Housing Spending Insights (HSI) report has been released, which gauges household spending across CBA bank accounts.

CBA’s HSI recorded a further slowing in March, with per capita household spending rising just 1.4% over the year, well below CPI inflation of 3.6%:

It was the softest per capita household spending since the onset of the pandemic in early 2020.


While overall household spending is falling in real terms, there are large variations between housing cohorts.

As illustrated in the following chart, renters have cut spending the most, with overall spending before CPI inflation (~3.6%) and population growth (~2.5%) growing only 1.3% in the year to March.

Homeowners with a mortgage have also cut spending in real terms, recording 4.5% overall growth in the year to March.


At the other end of the spectrum, households that own their homes outright—primarily older Australians—have increased their spending by 6.3% in the year to March, which is above CPI inflation (~3.6%) and population growth (~2.5%).

CBA home ownership status

Baby boomers are largely unaffected by the surge in rents and mortgage repayments, since they mostly own their homes outright.


Many baby boomers are also benefiting from higher investment returns.

While the rest of Australia is cutting back on spending to help rein in inflation, older Australians are spending large and working at cross-purposes with the RBA.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.