Resilient consumption and easing property gains send mixed signals for rates outlook
Household spending in Australia rose again in November even as signs of a slowing housing market continued to build.
The Australian Bureau of Statistics’ (ABS) monthly household spending indicator increased by 1% in November, following an upwardly revised 1.4% gain in October. That marks the first time since 2022 that monthly spending has recorded consecutive rises above 1%. Annual growth in household outlays picked up to 6.3% year on year.
According to the latest Economic Update from ANZ, the upside surprise was stronger than market expectations and was driven in large part by Black Friday discounting and large-scale entertainment and sporting events late in the year.
“Growth in household spending was broad, with eight of the nine spending categories rising in November,” said Tom Lay, ABS head of business statistics.
Services lead spending gains
Services consumption was the main driver of November’s increase, with services spending up 1.2% month on month and 7.8% over the year. Outlays on recreation and culture, hospitality and transport all grew by more than 1% over the month, while health spending also rose, albeit more modestly.
Goods spending climbed 0.9% in November and is now 4.9% higher than a year earlier, although this was weaker than October’s 1.9% jump, reflecting heavy discounting that started earlier in the season. Spending on furnishings, household equipment, and clothing and footwear all posted gains of at least 2% over the month, while food spending rose and alcohol and tobacco outlays declined.
Discretionary spending grew 1.2% in November, softer than October’s 1.7% increase, while essential spending rose 0.7%. On an annual basis, the gap between discretionary and essential spending growth continues to narrow.
Housing market loses momentum
In contrast to robust consumption, ANZ highlighted clearer evidence of a loss of momentum in the housing market, framing property as an “interest rate sensitive leading indicator” for broader economic conditions.
Capital city dwelling values increased 0.5% in December – the smallest monthly rise since April. Auction clearance rates have been easing since September and are now at their lowest levels since early 2025.
Price movements were uneven across the capitals. Adelaide, Perth, Darwin and Brisbane each recorded monthly gains above 1.5%, while both Sydney and Melbourne posted their first price falls since January 2025, with values in both cities slipping 0.1% over the month.
ANZ linked this divergence largely to differences in supply, with smaller capitals still facing low listings, while new listings in Sydney and Melbourne sat around 10% above their 10‑year December averages.
Price growth remains strongest in the middle and lower price quartiles, where values rose around 1% over the month, compared with flat prices in the top quartile. ANZ suggested this pattern may be partly associated with the expansion of the 5% Deposit Scheme, which supports lower-deposit borrowers in entering the market.
Building approvals posted a strong rebound in November, rising 15.2% month on month after a 6.1% fall in October. The turnaround was driven by a 34.1% surge in private sector unit and townhouse approvals.
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