Elizabeth Tilley, Property Journalist
First published 23 Oct 2026, 5:00am
Australians are cutting back on groceries, skipping medical appointments and turning to credit to make ends meet as the housing affordability crisis spills into the wider economy.
New research reveals the financial squeeze is no longer confined to mortgage repayments, with struggling households tightening their belts and businesses across hospitality, retail and construction feeling the pain.
Experian’s latest Housing Pressure Report found 43 per cent of Australians surveyed had reduced spending on dining out and takeaway food, while almost one third had cut their grocery bills.
The cost of living is taking its toll on Australian households.
More alarmingly, 18.7 per cent had delayed healthcare or dental treatment, while one in five sometimes or regularly relied on savings or credit to get through the month.
And with interest rates and essential living costs squeezing household budgets, the fallout is spreading to businesses.
Trading at pubs and bars fell 1.5 per cent in real terms over the year to June, while cinemas recorded a 2.4 per cent decline.
Clothing, footwear and accessories retailers were among the hardest hit, with trading down 3.4 per cent.
.Interest rates and essential living costs are squeezing household budgets. Picture: Max Mason-Hubers.
Even cafes, restaurants and takeaway businesses managed just 0.5 per cent real growth, while operators were taking longer to pay their bills.
The construction sector was also showing signs of strain, with trading among land development and site preparation businesses falling 3.4 per cent, while building installation services declined 2.4 per cent.
The findings paint a troubling picture of the ripple effects of Australia’s housing affordability crisis, as households increasingly prioritise keeping a roof over their heads.
Experian found 55 per cent of Australians surveyed were experiencing significant pressure from rent or mortgage repayments.
More than four in 10 said they could not confidently absorb another 10 per cent increase in repayments without cutting essential spending or borrowing more.
The cost of living crisis is starting to bite. Picture: Max Mason-Hubers.
The number of home loan accounts showing signs of financial strain rose 7.3 per cent in the first six months of 2026, more than triple the increase recorded during the same period last year.
Regional borrowers were particularly vulnerable, with mortgage stress 10.5 per cent above the national average.
The financial squeeze is also changing Australians’ property ambitions.
Almost one in five prospective buyers surveyed had delayed purchasing a home, while 8.4 per cent had abandoned their plans altogether.
And there could be more pain ahead, with 30.8 per cent of households expecting their ability to manage housing costs to deteriorate over the next 12 months, compared with just 18.7 per cent expecting an improvement.
But Experian’s head of data science Barrett Hasseldine said housing pressure was not showing up evenly across Australia.
“The strongest signal from the data is that the Australians reporting the greatest repayment pressure due to rate rises are often the same groups showing rising strain in credit
“That may provide lenders with additional insight to help identify changing circumstances earlier and support customers appropriately.”
Aussies are slashing their spending as pain spreads beyond mortgage repayments.
Experian’s spending data also showed differences in spending patterns, with home buyer spending up just 2.2 per cent year on year in the June quarter, compared with 10.4 per cent among renters.
“Understanding housing pressure requires more than a single metric. When repayment trends, hardship indicators and behavioural signals are viewed together, lenders and consumer-facing organisations, can build a broader picture of changing customer circumstances earlier and respond in a way that better reflects a consumer’s situation.,” Mr Hasseldine said.
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