Baby boomers are fuelling ‘s inflation crisis by continuing to spend big on luxury holidays and slap-up restaurant meals while renters go without, new data shows.
Commonwealth Bank consumer insights have revealed those who own their home outright have been the nation’s biggest spenders during the past year.
And while others struggle with the soaring cost of living, these wealthy home-owners have been living the high life.
Data reveals they have been splurging on overseas holidays, posh cruises, eating out at restaurants, updating their wardrobe and having the latest technology at home.
Renters, meanwhile, have been cutting back on dining out and even paying power bills – and those battling ever-increasing mortgage repayments have had to go without new clothes and electrical appliances.
Stephen Halmarick, the Commonwealth Bank’s chief economist, said those who owned their own home outright were more likely to be spending big.
‘Generally that’s going to be – I don’t know what the politically correct term is – older ns, probably 55 plus, baby boomers are like 60-plus,’ he told Daily Mail .
The older age group, liberated from mortgages or rent, have also been flocking to online holiday booking sites where they are the biggest spenders.
‘It does suggest that there are some people in the economy that are still happy to spend some money on travel,’ Mr Halmarick said.
‘If you haven’t had to increase the amount of money you’re paying on housing then that would certainly give you an advantage.’
The Commonwealth Bank Household Spending Insights data on its customers’ banking habits showed homeowners spent more last financial year, while renters cut back.
Outright home-owners saw their spending increase by 2.1 per cent while those with a mortgage spent 1.5 per cent more, and renters cut their outgoings by 0.9 percent.
‘There’s quite a divergence across the three groups,’ Mr Halmarick said.
‘Renters are really doing it tough and those that own a home outright are in a better position.’
The youngest baby boomers, born between 1946 and 1964, are this year turning 60, making them the most financially comfortable generation, along with the slightly younger Gen X crowd, born between 1965 and 1980.
But inflation in the year to May surged by 4 per cent, far higher than the Reserve Bank’s 2 to 3 per cent target.
Mr Halmarick said the big spending habits of older consumers was creating an inflation challenge, following 13 interest rate rises since May 2022.
‘It does indicate to the Reserve Bank that the burden of the adjustment is being very unevenly felt across the economy – that does make it more challenging for the Reserve Bank,’ he said.
‘If one group is spending money and others are not, then that does make it more difficult.’
Older consumers faced 18 per cent interest rates in 1989, but at that time, houses in capital cities cost just four times the average salary, compared with 12 times now in Sydney.
Mr Halmarick said it was unfair to blame baby boomers for ‘s cost-of-living crisis.
‘Maybe they worked for it – you’re talking to someone who’s 59,’ he added.