Login
ISCOVER
Despite having larger financial obligations, mortgagors are spending more on discretionary items than renters, according to bank data.
The Commonwealth Bank of Australia (CBA) has released new data that has revealed a significant spending gap between renters, mortgage owners, and home owners.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
Released on Thursday (15 August), the most recent Commbank Household Spending Insights (HSI) Index shows spending largely remained unchanged at 148.2 in July, in seasonally adjusted terms, after a 0.8 per cent gain in June.
However, the HSI has also revealed that cost-of-living pressures are impacting Australians in different ways.
For example, it found that renters are tightening their outgoings more than those who have a mortgage.
The HSI Index tracks household spending across 12 categories, using de-identified payments and home lender data from approximately 7 million Commonwealth Bank of Australia (CBA) customers.
The data comprises roughly 30 per cent of all Australian consumer transactions.
It found that discretionary spending by renters was up just 0.3 per cent for the year to July compared to mortgage holders (up 3.3 per cent) and home owners (up 4 per cent).
Over the past year, renters have lifted spending on insurance and utilities, while reducing spending on education, household services, hospitality and recreation, the greatest number of categories among the three groups.
The release said spending by renters has lagged behind their counterparts since late 2022, with recent lifts in rents contributing to the growing difference.
CBA chief economist Stephen Halmarick said: “Spending by renters remains close to flat this year with significantly more cutbacks on discretionary spending compared to homeowners or those with a mortgage.”
Halmarick also said the impact of the federal government’s income tax cuts on household spend wasn’t yet evident.
“As income tax cuts have only just taken effect, we will likely have a clearer picture of impacts on spending behaviour over the coming months,” Halmarick said.
“More broadly, we expect that softer economic data, a further deceleration of inflation, and easing of monetary policy by overseas central banks will see the RBA begin to cut interest rates in the months ahead.”
On Wednesday (14 August), CBA released its full-year results for the financial year ended June 2024, showing it had grown the group’s mortgage book by $12 billion between June 2023 and June 2024 – a 2 per cent increase in total balances.
The data showed 66 per cent of CBA home loans are now originated through the direct channel, an increase on 61 per cent in June 2023.
[Related: Two-thirds of CBA home loans originated through direct channel]
JOIN THE DISCUSSION