The school holidays and football finals have helped deliver a small lift in overall consumption but spending per person is continuing to slide as high living costs and interest rates crunch family budgets.
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The value of purchases rose 0.5 per cent in September, including an 8 per cent jump in bottle shop sales and a near-3 per cent rise in hospitality spending, particularly on eating out, as major events and time off encouraged sports fans and families to splurge, according to the CommBank Household Spending Insights index.
Spending at service stations also rose by 3 per cent as surging global oil prices forced up fuel costs.
Household expenditure in the ACT was resilient in September, rising by 1.5 per cent - the equal biggest increase among all the states and territories.
But its annual growth rate of 2.3 per cent, while outstripping that in New South Wales and Victoria, is much softer than the 4.8 per cent annual expansion registered in Western Australia and South Australia.
Nationally, the index - which is based on analysis of almost a third of all transactions in September - found purchases of basic household goods and services, including clothes, appliances, furniture, repairs and home maintenance, weakened even further last month and was down significantly from a year earlier.
![The footy finals and school holidays helped deliver a boost to consumer sopending in September. Picture AAP The footy finals and school holidays helped deliver a boost to consumer sopending in September. Picture AAP](/images/transform/v1/crop/frm/202296158/dfaacf32-1fe0-4bc0-8cde-4e392ae5dc5e.jpg/r0_241_5427_3618_w1200_h678_fmax.jpg)
The Commonwealth Bank chief economist Stephen Halmarick said that while index was rising, it was being outpaced by inflation, which meant consumer expenditure was actually declining in real terms and was even weaker when taking strong population growth into account.
"The effects of [Reserve Bank of Australia] rate hikes is reflected in a slowdown in the [annual] pace of household spending," Mr Halmarick said, from 8.3 per cent in May last year to just 1.8 per cent last month.
The Reserve Bank of Australia estimates the 4 percentage point increase in interest rates since May last year has reduced household spending by up to 0.8 per cent in the past year and is likely to drag further on expenditure in coming months even if there are no more rate hikes.
RBA assistant governor Christopher Kent said the share of household disposable income taken by mortgage repayments had risen from around 7 per cent to a record high of almost 10 per cent, and was set to climb even higher in coming months as more low fixed rate mortgages expired, forcing borrowers to make larger repayments.
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Mr Kent told a conference in Sydney this would weigh on spending.
"Many borrowers have had to cut back on spending to meet higher mortgage payments, while also feeling the pain of rapidly rising living costs. This has led to slower growth in demand for goods and services," he said.
The International Monetary Fund reported that Australian mortgage holders faced the highest debt servicing ratios among a selection of 15 advanced economies, ahead of households in countries including Norway, Canada, Sweden and the Netherlands.
Mr Halmarick said that even if, as he expects, official interest rates do not rise any further, household consumption spending was likely to remain subdued.
High petrol prices, which he warned could rise even higher because of the conflict in Israel and Gaza, meant fueling the car would claim an even bigger share of family disposable income, meaning less to spend on other goods and services.
The CBA economist tipped that the official cash rate would remain at 4.1 per cent until May next year when the first rate cut would be made.