Australians Spend Big on Durable Goods, Fueling Inflation and Rate Hikes
February 15, 2026
After years of tight spending due to high living costs, many Australians started buying durable goods like armchairs, air fryers, and coffee machines once they received tax refunds or enjoyed lower mortgage rates. This unexpected rise in demand and prices caught the Reserve Bank of Australia (RBA) off guard. It contributed significantly to their decision to raise interest rates to curb spreading inflation.
RBA Governor Michele Bullock said, "The things that are driving the uptick in inflation really are housing, durable goods and market services."
Why are Australians buying more durable goods now? Economist Shane Oliver explained: "People seem to be withstanding higher levels of debt than previously thought." Australians used recent financial relief to regain confidence and spend.
Companies like Breville saw double-digit revenue growth, especially in coffee machine sales. Premium furniture brand Nick Scali reported a 13% rise in sales and better profit margins, while online retailer Temple & Webster’s revenue went up 20%, despite some customers waiting for discounts.
Even with historically high household debt and housing costs, many Australians are still spending freely as long as they have jobs. Senior economist Ashwin Clarke noted, "We had three interest rate cuts last year which also helped to boost household incomes."
Data from the Commonwealth Bank shows 16 months of spending growth, with Australians splurging on travel, events, clothes, and hardware.
Older Australians, especially those over 55, are the most active buyers of durable goods. Retail expert Prof Gary Mortimer said, "They’re updating TV sets, they’re travelling... they’re upgrading the car. They’re the big spenders at the moment."
The RBA raised cash rates recently, citing strong demand in housing and consumer durables as a key factor behind rising inflation. They warned the outlook is uncertain, as these goods might signal more lasting inflation.
After some positive earnings, signs are mixed. Nick Scali shares fell over 15% following weaker January sales. This hints last year’s shopping spree might be slowing due to renewed cost pressures.
The big question: Will Australians keep buying couches and coffee machines, or will rising inflation stop the spree?
Read More at Theguardian →
Tags:
Australia
Consumer spending
Inflation
Reserve Bank
Housing Costs
Interest rates
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