In an alarming revelation from Canstar’s seventh annual Consumer Pulse Report, more than three-quarters of Australians are reporting no respite from cost of living pressures this year. The comprehensive report, which outlines the nation’s financial stress points, debt levels, saving patterns, and investment goals, was shaped by the feedback of 2,072 Australian adults.
Contrasting the national sentiment, a fortunate 17% have found relief through cost-cutting behaviours (70%), reduced bills (27%), and increased income (20%). Yet, 76% of Australians are grappling with unchanged or rising bills. The Australian Bureau of Statistics (ABS) reports a dip in inflation, though it remains outside the Reserve Bank’s (RBA) target band. Confidence in the RBA and government’s ability to control inflation has waned, dropping to 50% from 56%.
Steve Mickenbecker, Canstar’s finance expert, expressed his concerns, stating, “Only one in every two Australians feels the cost of living crisis will ease in 2024,” pointing to the varying degrees of optimism among men and women, and among generations, with Gen Z displaying more hope than others.
Supermarkets are under scrutiny as groceries replace housing-related expenses as Australians’ primary financial concern for 2024, a sentiment continuously reported for four years. On weekly grocery spend alone, Australians are currently outlaying an average of $186, a figure dwarfed by the national median rent of $588 per week and mortgage repayments on a $600,000 loan at an average monthly cost of $3,578. Mickenbecker notes the disproportion, emphasizing the opportunity for savings, “The Report highlights it’s possible to make savings on both big ticket items and everyday living costs.”
Looking to the future, approximately half of Australians fear they will struggle to cover bills or loan repayments in 2024. This concern disproportionately affects females and households with children. While a considerable number believe they are living within their means, the percentage expressing confidence in their financial management has decreased since 2020, from 73% to 56%.
Mickenbecker advises that, “Getting our finances organised is the way to deal with the increased cost of living.” He encourages negotiation for better mortgage rates and switching service providers to economize, as suggested by Canstar’s Cost of Living Comparison, which notes potential savings of up to $12,741.
Debt remains a concern, with some Australians triumphantly reducing their outstanding amounts. Still, a worrying 26% do not know the total of their debt. Credit cards are spotlighted as the primary debt hazard, with personal credit card debt ballooning to $17.27 billion, cautions Mickenbecker.
Savings have suffered under the weight of living expenses, with only 51% of Australians setting money aside monthly—a stark decline from 77% last year. Younger generations are postponing holiday plans and car purchases due to these financial constraints. Generational discrepancies are evident in delayed savings goals, particularly affecting Millennials and Gen Z.
Condemning the current financial climate, Mickenbecker observes, “Aussies are saving less than they have been able to in previous years as cost pressures decimate the ability to put money aside.”
Mortgage holders are also feeling the pinch, with more than a third apprehensive about sustaining the current level of interest rates into the next year. This trepidation extends to the rental market, where 63% have seen rent spikes, resulting in renters seeking more affordable accommodations or making lifestyle cuts.
The rental shortages and increased living costs have stymied many people’s aspirations of property ownership. A significant proportion of renters (29%) can’t save at all, with nearly a third saving less than before. Mickenbecker underscores the role of family support in these times, yet concedes the financial constraints many families face.
While a snippet of Australians decipher strategies to overcome financial barriers, the Canstar report paints a stark picture of widespread fiscal discomfort, invoking urgent calls for savvy financial management and support systems to navigate the ongoing cost of living crisis.