Cost-of-living pressures ease, boosting confidence among Aussies
Financial stress levels of Australian consumers have dropped to its lowest point in two years, as households begin to feel the effects of interest rate cuts and a slight easing in living costs, according to National Australia Bank's latest Consumer Sentiment Survey.
The report shows NAB’s Consumer Stress Index fell to 56.6 in June, down from 59.6 in March, and now sits below the long-term average. The figures suggest a growing sense of financial stability among Australians, particularly mortgage holders.
NAB executive Lucia La Bella said recent Reserve Bank of Australia rate reductions were already influencing how people view their financial position.
“We’re seeing a sense of optimism about the future and more confidence that there’s light at the end of the tunnel,” La Bella said. “We’re seeing some relief already among mortgage holders with almost half saying they’re feeling the benefits of recent rate cuts.
“With another RBA meeting just days away, many households are watching closely and planning their budgets.”
The RBA cut rates in both February and May, with market watchers expecting a further reduction at next week’s meeting and possibly another in August. These decisions come as the central bank attempts to support weak economic growth and bring inflation closer to target.
Although the cost-of-living remains a top concern, NAB’s data indicates it has eased to its lowest level in three years. Many households continue to make changes in spending habits, with reductions in dining out, travel and entertainment. On average, Australians are saving $4,860 a year by cutting back and adjusting their purchasing behaviour.
Consumers are also shifting their buying habits, with one in three switching to less expensive brands, one in four researching more before purchases, and 10% actively seeking out deals.
“They’re showing resilience, making smart choices, and setting themselves up for a stronger financial future,” La Bella said.
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