As the financial battle lines between millennials and baby boomers continue to be drawn over brunch, a national survey has shown that when it comes to discretionary spending, the two generations have more in common than they might think.
Young people and middle aged consumers share very similar attitudes about lifestyle spending, the NAB quarterly consumer behaviour survey released on Wednesday found.
Young people are no more willing to cut back lifestyle spending than middle-aged consumers and their spending behaviours typically mirrored those of middle-aged consumers.
"We were not expecting that result," NAB chief economist Alan Oster said. "Normally in economics, in your 20s and 30s you're saving up for deposit and as you get older, you change your spending spending patterns. But that doesn't seem to be happening at present.
"Maybe they've given up, but we don't know that," he said.
The median house price in Sydney has increased to a record $1,151,565, according to Domain Group data, while Melbourne house prices are sitting at a record $843,674
Australians consumers were asked to rate the extent to which they would cut back lifestyle spending to have more money for savings, housing and retirement. Interestingly, the survey showed millennials and baby boomers mirrored each others' habits.
When asked whether what they were prepared to spend much less on, most Australians were likely to cut back on taxis and Uber (47 per cent), takeaway food (42 per cent), fitness (41 per cent) and alcohol (41 per cent). They were least inclined to cut back on the internet (14 per cent) and mobile phones (19 per cent).
But about four in 10 Australians also said they did not want to cut lifestyle spending because "life was too short" (14 per cent) or they "couldn't see the point as they'd never be able to afford a home" (5 per cent).
"It was very interesting that these attitudes were quite consistent across all age groups - and that young people in particular shared very similar attitudes to lifestyle spending to middle aged consumers," the survey said.
It comes after a national obsession about the corelation between house prices and young people's spending habits, including comments made by BRW Rich List-er Tim Gurner about cutting back on smashed avocado and coffee. Interestingly, nearly a third (32 per cent) of all respondents said they would make no change to their spending habits on coffee.
Combing two of Melbourne's obsessions - lattes and avo
A post shared by Truman Cafe (@trumancafealbertpark) on May 11, 2017 at 2:02pm PDT
Overall, Australian consumers are the least stressed they ever have been, with NAB's Consumer Anxiety Index falling to a survey low of 55.9 points in the first quarter of the year, compared with 58.7 in the final quarter of 2016. This was led by fewer concerns over job security, retirement and health. In terms of sentiment by group, young women aged 18 to 29 were the most anxious consumers, led by very high levels of anxiety over their cost of living.
"To me what the survey is showing is that people are less stressed, which surprised me a little bit," Mr Oster said. "But at the same time, they're not spending a lot - that's the disconnect."
There was traditionally a very strong relationship between consumer spending and house prices, he said.
"When house prices go up, people feel wealthy and they spend more and there's an element of that present in Sydney and Melbourne at present, but the relationship is weaker than it normally has been and no one is really sure why.
"The guess is, and it's a guess at this stage, is that people are saying, 'I can't just spend because I have more money in terms of my equity, because it might not end up so good in the medium term'."
