Australian consumer performance remains resilient, supported by a strong labour market, accumulated borrower equity and disciplined lending standards. The RBA continues to note that
most households remain in a strong financial position, while APRA system data shows mortgage arrears remain contained. Recent major bank results also support this view, with CBA reporting lower home-loan arrears and a high proportion of home-loan customers ahead of scheduled repayments, while Westpac reported lower Australian mortgage 90+ day delinquencies and declining stressed exposures.
However, pressure is building….
Higher interest rates, persistent inflation and rising essential costs are likely to place further strain on household cash flows through the second half of 2026. This is consistent with the more cautious provisioning stance evident across major bank results, particularly in response to heightened geopolitical uncertainty, fuel costs and downside economic risks.
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