The property sector is navigating a complex web of consumer anxiety and unexpected economic resilience, as new data reveals a severe housing affordability crisis operating alongside a surprising mid-year lift in consumer spending.
Fresh insights from global data and technology company Experian paint a stark picture of the psychological and financial toll facing households.
According to Experian’s Spend Index Report, which combines consumer sentiment research with data from millions of active credit users, only 33% of Australians feel optimistic about their household finances in 2026.
For the real estate sector, the pressure cooker is firmly centred on housing costs.
The research reveals that “46% of Australians say rising interest rates are making housing harder to afford, while one in four say housing costs have increased more than any other household expense.”
Furthermore, Experian’s hard data shows the rental market offers little relief, noting that “rents rose 8% in 2025, following a 10% increase the previous year.”
This sustained pressure has fundamentally changed how Australians interact with their finances, with 77% altering their behaviour due to economic concerns.
To make ends meet, “more than one third (36%) of Australians relied on credit to cover everyday or essential expenses,” while Buy Now, Pay Later spending jumped 16% in 2025.
Barrett Hasseldine, Head of Data Science at Experian Australia and New Zealand, explained that consumers are adapting rather than completely shutting down.
“Consumers are becoming far more strategic in how they manage financial pressure. Rather than pulling back spending entirely, many households are reprioritising where money goes and using a mix of savings, spending choices and flexible payment options to manage cash flow.”
What this means for buyers and renters
Experian’s report highlights a clear divergence within the property market itself: recent home buyers are facing a double hit from higher mortgage values and higher interest rates, leading homeowners to tighten discretionary spending.
Renters also continue to maintain stronger day-to-day spending despite intense affordability pressures.
Yet, just as households report cutting back on major expenses, the latest NAB Consumer Spend Trend indicates that the broader retail economy isn’t grinding to a halt just yet; in fact, total consumer spending rose 1.2% in June and 6.8% over the year.
Surprisingly, it was discretionary spending that led the monthly rise, increasing 1.9% in June with growth across all categories except hospitality. Non-discretionary spending remained broadly unchanged.
NAB Chief Economist Sally Auld said that while the June data suggested consumer spending had held up better than expected, the tailwinds keeping budgets afloat might be temporary.
“There has been some support for household budgets from policy interventions, including the fuel excise cut and free or reduced public transport fares in some states. Retail petrol prices were lower in June, which may have also helped to support spending in the month.”
What to watch this spring
While the mid-year spending increase offers a temporary reprieve for the broader economy, macro economists warn that the property market could face headwinds in the latter half of the year.
NAB noted that spending growth actually eased slightly in the June quarter to 1.5%, down from 1.7% in the March quarter, and expects growth to slow further as momentum in the broader economy moderates.
For the real estate industry, the critical metrics to watch will be consumer confidence and the wealth effect tied to property values.
“The next few months of spending data will be important, given a variety of influences at play. There is a chance that falling house prices in major capital cities dampens the consumption story a little, and the recent escalation in the Middle East conflict may pressure petrol prices higher which could slow discretionary spend,” said Ms Auld.
As standard household savings deplete, with 72% of Australians surveyed by Experian reporting a decrease in their savings, the real estate market is entering a crucial phase.
Property professionals will need to closely monitor how the combination of high rents, mortgage strain, and shifting capital city house prices ultimately impacts buyer and tenant capacity moving into the spring selling season.
For agents on the ground, this data translates into a few practical conversation points this spring.
With affordability front of mind for buyers, be upfront about how rate and price movements are shaping demand in your local area, rather than letting buyers rely on headlines alone.
With vendors, use the discretionary spending divide to set realistic price expectations because if mortgage holders are tightening their belts, that same caution is likely showing up in how they approach negotiations.
And with softening capital city prices and cost-of-living pressures still in play, it’s worth checking in regularly with both buyers and sellers on their financial comfort levels, rather than assuming market conditions from a few months ago still hold today.