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Where are Aussies looking to spend their money in 2021?
Australians are increasing their spending intentions, with travel and entertainment set to be the big winners, a new report has revealed.
Where are Aussies looking to spend their money in 2021?
Australians are increasing their spending intentions, with travel and entertainment set to be the big winners, a new report has revealed.
The latest research from Commonwealth Bank has revealed a rise in both actual travel spending and travel-related Google searches in December, pushing spending intentions for travel into positive territory for the first time this year.
As Aussies remained confined to Australia, and some to their own state, purchases of camper, recreational and utility trailers pushed up spending in December, with rentals of motorhomes and recreational vehicles as well as trailer parks and campgrounds also very popular last month.
According to CommBank, this points to broad benefits for Australia’s regional economies, as Australians who typically head abroad are forced to spend their savings on domestic getaways.
CBA senior economist Belinda Allen explained that the rise in travel spending was a signal that the economy is rebounding from the COVID-19 pandemic.
“Travel spending intentions jumped solidly in December 2020 as state border restrictions were largely lifted,” Ms Allen said.
Entertainment spending intentions also jumped in December, buoyed by both higher actual spending and Google search activity. Australian consumers also increased their spending intentions on health and fitness, with actual spending activity higher over the month even as Google searches declined.
Meanwhile, spending intentions for home buying pulled back in December, after jumping higher in November. Home loan applications ticked down in December from a month earlier but remained higher year-on-year.
“We continue to expect the home buying market to be a key source of support for the Australian economy in 2021, driven largely by the very low level of interest rates,” Ms Allen said.
Australia’s Treasurer, Josh Frydenberg, has previously backed a spending-led recovery as Australians stockpiled a wealth of $200 billion during the COVID-19 pandemic, having tightened their spending habits on the back of the economic uncertainty in 2020.
The government is now hoping that this amassed wealth will drive economic recovery once the JobKeeper wage subsidy is wrapped up in March.
“With an additional $200 billion sitting on household and business balance sheets compared to the start of last year, there is a huge sum of money available to be spent across the economy, helping to create jobs and maintain the momentum of our economic recovery,” Mr Frydenberg said earlier this month.
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