Brace for a big drop in consumer spending in 2023

Investopoly · Dec 13, 2022 · 12m

As you are aware, the RBA has aggressively hiked rates by 3% p.a. over the past 8 months, so variable home loan rates are now more than 5% p.a. (and investment loans approaching 6% p.a.). Fixed rate borrowers have avoided these higher interest rates. However, a lot of fixed rates will begin expiring next year. As such, many borrowers are facing much higher (40%+) mortgage repayments next year. These higher interest rates will have a huge impact on consumer discretionary spending and economic growth in 2023. Many Australians have accumulated large liquidity buffersMany Australians have enjoyed…