Australia’s consumers are quietly reshaping their budgets under cost‑of‑living pressure, trading down from big‑ticket purchases to smaller “feel‑good” spends. At the same time, confidence and credit risk indicators are worsening, which matters for mortgage brokers assessing how much financial stress borrowers can really absorb.
Experian’s March 2026 spotlight on “affordable luxury” finds households are delaying large, postponeable purchases but still carving out room for lower‑cost treats, from personal care to streaming subscriptions and travel experiences.
Louis Tsang (pictured), head of analytics consulting & insights A/NZ, said the value lies in understanding how behaviour is changing, not just the raw spend numbers.
“What we’re seeing is a reshaping of discretionary behaviour. When budgets are under pressure, many households defer larger purchases and redirect towards smaller, more manageable indulgences that still deliver emotional value,” Tsang said.
That pattern is showing up clearly in the numbers. Data from Experian’s Spend Index shows personal care outlays have proven particularly sticky. In Australia, the personal care index hit 131% in December, while cosmetics surged to 220% over the same period, highlighting the resilience of “small indulgence” categories around seasonal peaks. Digital goods are also showing structural strength, with the index for items such as streaming, software subscriptions and in‑app purchases rising from 108% in January 2022 to 151% by December.
Experiences continue to attract wallet share despite mortgage and rental pressures. Airline travel spend has climbed sharply, with domestic airline spend at an index level of 266% and international at 311%, signalling a clear preference for memories and experiences over major household purchases.
Dining remains another area of relative resilience. Experian notes that spending across restaurants, fast food, pubs, and cafes has held up in Australia compared with New Zealand, underlining the social and emotional role that smaller outings still play even as budgets are squeezed.
Behind these patterns, Experian’s broader macro indicators point to a more fragile backdrop for borrowers that brokers are working with. Unemployment has risen to 4.3% as more people enter the labour force, while the Reserve Bank’s cash rate increase to 4.1% keeps monetary policy firmly in restrictive territory. At the same time, ANZ–Roy Morgan data show consumer confidence falling for the fourth consecutive month to 73.4 in March, the lowest level in the past five years, as households face another cost‑of‑living squeeze and continued financial stress.
Experian’s consumer risk barometer also shows default risk continuing to edge higher, while 60‑day‑plus business‑to‑business delinquencies are rising across sectors such as hospitality, retail, and construction.
Read the full March Experian Business Pulse Monthly here.
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