EOFY sales fail to spur normal June spending spree, as data points to signs of weakness

Household spending rose a modest 0.3 per cent in June, but the CommBank Household Spending Insights (HSI) Index suggests that inflation and higher-for-longer interest rates are leading to a pull back by consumers, with End of Financial Year (EOFY) sales less impactful than 2025.

The latest data showed gains across 10 of the 12 categories, led by Utilities and Education. Compared to 2025, spending on household goods had a soft month despite the EOFY sales, with retail spending easing to 0.2 per cent in June comparted to 0.6 per cent in May. 

Spending on Hospitality rose only marginally by 0.1 per cent in June, compared to 0.9 per cent growth in May, indicating that sporting events hosted through June did little to boost spending growth. 

“The softening we are seeing in the CommBank HSI is broadly in line with our expectation that household spending will slow over the remainder of this year,” CommBank’s Head of Australian Economics, Belinda Allen, said.

“Slower household income growth, together with the ‘wealth effect’ from a downturn in the housing market is expected to weigh on spending. However, consumers may dip into their savings buffers which would see spending slow less than we expect.

“The last three months has seen some volatile moves in the HSI due to the up and down of petrol prices, seasonality around payments of bills for education and utilities as well the timing of sales,” Allen said.

“The Iran war, the downturn in the housing market and higher interest rates continue to weigh on consumer spending. 

“For the first six months of 2026, the average monthly increase is sitting at 0.3 per cent, slightly lower than the 0.5 per cent average through 2025. With the rate of inflation higher, it does suggest the volume of spending growth has softened.”

Big pullback in recreational spending

June also saw a rapid deceleration in seasonally adjusted recreation spending, from 2.3 per cent growth in May to just 0.2 per cent. 

Lower spending on ski resorts, camping stores, museums and galleries and tour operators sapped spending momentum in the category.  The poor weather to start the ski season may have weighed on ski resort spending which experienced a large fall compared to 2025 in the month of June. 

Still, solid gains in annual spending on online travel bookings, commercial airlines, fitness clubs and gyms, travel agencies and sporting goods stores, helped keep the category in the green.

Older Australians the top spenders as younger cohorts pull back

Across the different age cohorts, spending growth was strongest among those aged 65+, up 10.1 per cent a year in the 12 months to June 2026. The 55-64 cohort also recorded solid growth of 6.2 per cent a year, while spending among 18–24-year-olds rose 5.4 per cent a year. 

Spending growth was softer across the cohorts who are more likely to have a mortgage, with spending up 4.5 per cent per year for 35-44- and 45–54-year-olds, and just 4.2 per cent higher for 25–34-year-olds. 

However, compared to June 2025, annual spending growth has moderated across almost all age cohorts. The largest slowdown was among 18–24-year-olds where growth eased from 9.9 per cent per year in 2025 to 5.4 per cent per year in June 2026.

Regional spending outpaces metro areas 

Annual regional household spending growth accelerated in the year to June 2026, compared to June 2025, while spending growth in metro areas slowed. Regional Queensland and regional WA were the strongest performers over the year, while metro NSW, the ACT and metro Victoria were the weakest. 

“Weaker spending in metro areas of NSW, Victoria and the ACT reflect the jurisdictions that recorded the weakest home price growth over the past 12 months, highlighting how the downturn in the housing market and higher interest rates are beginning to weigh on consumer spending,” Allen said. 

Regional outperformance in part reflects stronger population growth and demand, particularly in Qld and WA. However, the conflict in Iran may have also contributed, with regions more exposed to the sharp increases in diesel prices compared to metro areas,” Allen added.