With the cost of living crisis continuing to take its toll, Australians are adjusting their spending habits, particularly when it involves small luxuries. Reports show significant changes across demographics, especially among younger generations. A recent survey from News.com.au revealed 77% of Australians are making concerted efforts to cut back on their expenses as daily necessities rise.
According to the Compare the Market Survey, millennials are leading the charge, with more than double the number of them indicating they would reduce spending on takeaway meals compared to baby boomers. Specifically, 34.2% of millennials plan to cut back, against only 14.4% of their older counterparts. This shift reflects broader trends where younger Australians prioritize saving over small indulgences such as fast food.
Chris Ford from Compare the Market commented on this trend, saying, "We see people vow to live healthier lifestyles, which explains the substantial reduction of takeaway meals. What was surprising is the vast difference between the generations." He noted millennials and Gen Z are more often cognizant of their spending habits, particularly as living costs ascend.
The survey underlines not just takeaway cutbacks but also reductions across various sectors including clothing, travel, and even streaming services. For example, approximately 7.2% of Australians said they would institute cutbacks on travel plans this year to save money.
Meanwhile, the housing market remains turbulent, with many potential buyers like Madeline Riseborough expressing frustration. “My budget keeps getting blown out,” she told SBS News, highlighting the phenomenon of experiencing increased expenses on essentials like groceries and healthcare instead of savings for home purchases.
The housing reports are mixed. While some sources indicate minor declines—0.17% drop nationally reported by PropTrack—forecasts for 2025 hint at factors influencing affordability. According to CoreLogic, home values rose 4.73% nationally during 2024, yet they hinted at potential price decreases contingent upon various economic indicators.
Senior economist Anne Flaherty commented on prospective buyers’ concerns, noting location-based discrepancies where certain cities may see declines, contrasting with stable or rising prices elsewhere such as Perth.
Lawless pointed to interest rates and macroprudential measures as significant variables impacting the housing market, with discussions surrounding how these will interact with consumer demand. "If we see interest rates drop, it could make homes slightly more accessible," he explained.
Indeed, the dynamics are complex; CoreLogic predicts softer housing values than last year. With interest and cost-of-living pressures gradually easing, the hope is for home purchasing to stabilize as incomes start to climb quicker than housing values.
Certainly, the anticipated shift arises against the backdrop of high household debts, particularly from mortgage pressures. Housing affordability promises to improve, yet it remains delicate as families navigate their finances through these trying times.
Tracking the upcoming macroeconomic changes will be pivotal; reports suggest changes could bear weight on housing demand impacting both rental sectors and buyer opportunities effectively.
Therefore, for individuals grappling with the ramifications of the cost of living crisis, the decisions to cut back on expenditures and reassess housing affordability become significant aspects of life moving forward. Observing developments closely will be necessary to navigate what remains to be seen as a challenging economic environment.