Housing costs reach beyond the home
Housing costs are now showing up well beyond mortgage accounts: Australian households are cutting everyday spending, while consumer-facing businesses report weaker trading. Experian’s latest Housing Pressure Report points to a squeeze with implications for housing demand and the wider economy. The connection matters because a household under pressure from rent or loan repayments has less room to absorb other costs or keep spending at its previous pace. When many households make similar adjustments, the effects can reach businesses that have no direct role in housing.
The report brings together survey responses, account indicators and trading data. Those measures describe different parts of the same pressure, but they shouldn’t be treated as interchangeable: reported intentions, signs of financial strain and business trading figures each capture a different stage of the story. Taken together, they suggest that housing affordability is affecting both household choices and activity around the property sector.
Household budgets absorb the pressure
Among Australians surveyed, 55 per cent said rent or mortgage repayments were causing significant pressure. More than four in 10 said they couldn’t manage a further 10 per cent rise in repayments without reducing essential spending or taking on more debt. That response points to limited capacity to absorb another increase. It doesn’t show that every household is in the same position, but it does underline how quickly a higher repayment could force a trade-off between housing and other needs.
The cutbacks are already visible. Some 43 per cent had reduced spending on dining out or takeaway, and almost one third had trimmed grocery bills. Nearly 19 per cent had put off healthcare or dental treatment; one in five sometimes or regularly used savings or credit to get through the month. These choices vary in consequence: eating out less may be a manageable adjustment, while postponing care or leaning on credit can signal a tighter bind. The survey doesn’t establish how long people can sustain those changes.
Home loan accounts showing signs of financial strain rose 7.3 per cent in the first half of 2026, more than three times the increase over the same period a year earlier. Regional borrowers recorded mortgage stress 10.5 per cent above the national average, highlighting how unevenly repayment pressure is landing. The increase is a warning signal, though it doesn’t by itself explain why accounts are under strain or how many borrowers will face lasting difficulty. The regional gap also cautions against describing pressure as a uniform national experience.
This is more significant than it looks: the strain is visible in both reported day-to-day choices and home loan account indicators. That said, the figures don’t establish a single cause for every household’s difficulties.
Retail and construction feel the spillover
Trading figures show the strain across discretionary spending and property-related industries. In the year to June, real trading fell 3.4 per cent for clothing, footwear and accessories retailers, 2.4 per cent for cinemas, and 1.5 per cent for pubs and bars. Cafes, restaurants and takeaway businesses managed only 0.5 per cent real growth, while operators were taking longer to pay bills. The pattern suggests households are becoming more selective about non-essential purchases, although these figures alone can’t show which customers or local markets are driving the change.
For businesses, weaker sales and slower bill payments can compound one another. An operator facing slower customer spending may have less cash coming in while still needing to meet costs. The report’s figures don’t say how individual businesses are responding, but the combination is a useful sign of pressure passing from household budgets into trading conditions.
Construction-related businesses also recorded declines: land development and site preparation fell 3.4 per cent, and building installation services dropped 2.4 per cent. The figures suggest housing affordability is affecting activity across the chain, from household purchases to businesses connected with development and building. They don’t establish that affordability alone caused the falls; they do show that weakness isn’t limited to shops and hospitality.
Here’s the thing: property-related business activity depends on more than buyers’ willingness to purchase a home. Development and building services sit further along the chain, so declines there add another dimension to the report’s account of pressure. A single period of weaker trading can’t tell us whether those falls will persist, but it’s a signal worth reading alongside the household data.
Buyer plans face a further test
Affordability is changing prospective buyers’ plans. Almost one in five surveyed had delayed a home purchase, while 8.4 per cent had given up on buying. Those responses point to different degrees of retreat: a delay leaves open the possibility of a later purchase, while giving up describes a more decisive change in plans. The survey doesn’t say what prompted each decision, so the figures shouldn’t be read as a precise forecast of future demand.
Looking ahead, 30.8 per cent of households expect their ability to manage housing costs to worsen over the next year; 18.7 per cent anticipate an improvement. Expectations aren’t outcomes, but the gap between the two groups suggests more households are bracing for deterioration than foresee relief. If you’re working in this space, that distinction matters: intentions can shape decisions before they show up in completed purchases or account performance.
Spending growth also differed by housing status in the June quarter. Home buyers’ spending rose 2.2 per cent year on year, compared with 10.4 per cent among renters. That contrast is notable, but it needs careful handling. The report’s figures show a difference in spending growth, not why the gap emerged or whether it reflects housing costs, other household circumstances, or both.
And yet, the comparison reinforces a point running through the report: housing status can coincide with very different spending patterns. A buyer managing repayments may have less flexibility in some parts of the budget, while renters’ spending growth can’t be explained from this figure alone. A gap, but not a full account of its causes.
What the signals may mean for the year ahead
Experian head of data science Barrett Hasseldine said repayment pressure and worsening credit performance often appear among the same groups. He said considering repayment trends, hardship indicators and behavioural signals together could help lenders and consumer-facing organisations spot changing circumstances earlier. The data points to a housing market story that will be shaped not only by borrowing costs, but by how much room households have left in their budgets.
That emphasis on multiple signals is sensible. A missed or strained repayment can tell an organisation something, while changes in spending or hardship indicators may add context; no single measure gives a complete picture of a household’s circumstances. The report doesn’t quantify how early a change could be spotted or what action an organisation might take, so the practical value of combining indicators remains a claim about potential rather than a demonstrated outcome here.
For the wider market, the report’s value lies in showing how affordability pressure can travel: from household budgets to retail trading, and from buyer plans to property-related businesses. The figures don’t prove that every link in that chain is caused by housing costs, and they don’t settle what comes next. But they do make clear that housing pressure isn’t confined to the monthly repayment. It’s also showing up in what households cut, what they postpone, and how businesses are trading.