Mortgage holder spending up 4.5%: CBA

The Commonwealth Bank of Australia’s (CBA) latest Household Spending Insights (HSI) for April 2024 has said that home owners who still hold a mortgage have increased their spending by 4.5 per cent year on year.

As of April 2024, CBA’s HSI has introduced spending habits by home ownership status, using a smaller subset of the data to split the HSI into three different categories: owner with mortgage, owner outright, and renter.

The major bank said the new breakdown highlights the challenging environment for mortgage holders and renters when compared to those who own their home outright.

The HSI said that insurance, utilities, and health took the top three spots of contribution to spending for mortgage holders, increasing by 9 per cent, 7 per cent, and 5 per cent, respectively.

Meanwhile, spending on hospitality, household services, and food & beverage goods decreased, down by 9 per cent, 5 per cent, and 18 per cent.

For home owners without a mortgage, insurance, utilities, and health also took the top three spots (11 per cent, 6 per cent, and 8 per cent); however, household goods and recreation made up the fourth and fifth spot in terms of positive spending contributions, up by 15 per cent and 14 per cent.

Spending for this cohort increased by 6.3 per cent year on year, the data said, while spending for renters increased 1.3 per cent as it continues to lag behind its counterparts since late 2022.

The difference in spending between renters and home owners is growing further due to the large lift in rents over the past year, the data has shown.

Indeed, the data said that renters have pulled back on spending across recreation (down 12 per cent), hospitality (13 per cent), food & beverage goods (20 per cent), and household service (4 per cent).

Overall, the HSI for April 2024 declined 1 per cent month on month, down to 148.1 index points following a gain of 0.4 per cent in March.

The data said the HSI index at 148.1 (down from the January 2024 peak of 149.7) has indicated that household spending has weakened over the first four months of 2024.

Annually, the pace of increase in the HSI has slowed to 2.6 per cent per year, down from 3.9 per cent in March. This has marked the slowest pace of increase since October 2023 and July 2021 during the middle of COVID-19 lockdowns.

[RELATED: CBA's business lending outpaces home loan growth]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.