How Rising Living Costs Are Changing the Housing Market

Australians are facing increasing financial pressures, and their spending habits are shifting in noticeable ways. The latest data highlights key trends across generations and regions, offering valuable insights into the challenges and opportunities within the housing market.

?Generational Differences in Spending Younger Australians, particularly those aged 18–29, have reduced their overall spending by 2% in the past year, including cuts in both essential and discretionary items. People in their 30s followed a similar pattern, reflecting the challenges of managing rising living costs while working toward financial goals such as homeownership.

In contrast, Australians over 60 increased their spending, with those aged 70 and above recording a significant 7.7% rise. This generational divide underscores how financial flexibility varies, with older Australians maintaining confidence in their spending despite economic challenges.

?Regional Insights on Spending The differences extend beyond age groups. Regional areas outpaced metro regions in spending growth, with an increase of 2.2% compared to 1.3% in cities. These trends also vary significantly by state:

• Western Australia: Spending grew by 3.1%, largely driven by leisure and travel. This reflects strong consumer confidence, which could signal a resilient housing market with stable growth opportunities.
• Queensland: With spending up by 3.9%, optimism in the region is buoyed by government support measures, such as energy relief programs and discounted public transport. These factors contribute to a positive outlook for property buyers and investors.
• Victoria: Spending in Victoria grew by only 0.4%, with households prioritizing essentials over discretionary purchases. This cautious approach suggests a more reserved housing market, where buyers may need to carefully evaluate long-term potential.

?What This Means for the Housing Market The strong spending growth in Western Australia and Queensland indicates resilience in these regions’ economies, which often correlates with steady or growing housing markets. Buyers and investors may find opportunities in these areas, particularly as consumer confidence supports ongoing activity in the property sector.

In contrast, Victoria’s restrained spending growth points to a more cautious outlook. However, this may also present opportunities for buyers looking for value in a market where competition may be less intense.

?Challenges for Younger Australians For younger Australians, the financial strain caused by rising costs continues to make saving for milestones like a first home more difficult. This underscores the importance of understanding market conditions and identifying regions where opportunities align with personal financial goals.

?Opportunities for Growth and Stability While the data shows challenges, it also highlights the importance of informed decision-making. Regions with higher consumer confidence, such as Western Australia and Queensland, could offer pathways to achieving long-term property goals.

If you’re seeking advice tailored to your financial situation, consider scheduling a consultation with ASK Financials today!