Australian Households Under Pressure: Mortgage Holders Have $450 Less in Monthly Disposable Income — Sydney Auction Clearance Rate at 53%

Weekly Market Focus

A new study has found that soaring oil prices and consecutive interest rate rises delivered the largest quarterly shock to Australian household finances since records began in 2004.

According to the report, a household with a mortgage and two petrol-powered cars now has around AUD $450 less in disposable income each month. Renting couples have lost approximately AUD $180 a month, while households that own their homes outright have been less affected, with their monthly disposable income falling by about AUD $140.

Economic consultancy Polis Partners said the Reserve Bank of Australia raised interest rates twice during the first quarter of the year. At the same time, international oil prices surged following US and Israeli strikes on Iran, pushing Australian petrol prices above AUD $2.50 per litre at one point.

Together, these pressures have almost erased the improvements household budgets recorded during 2024 and 2025, leaving the purchasing power of many families at levels last seen around 15 years ago. The report does not include the impact of the Reserve Bank’s further interest rate increase in May.

However, the financial impact has not been evenly distributed. Lower-income households have been hit hardest. For households in the lowest 20% of the income distribution, essential weekly expenses now exceed income by an average of around AUD $81, forcing many to rely on savings or credit to cover basic living costs.

Lower-middle-income households have also experienced a significant decline in disposable income. By comparison, higher-income households and those that have already paid off their mortgages have faced relatively limited pressure.

With oil prices rising again and uncertainty remaining over the future direction of interest rates, Polis Partners expects cost-of-living pressures on Australian households could intensify further this year.

Last Week’s Auction Results

Sydney: A total of 564 properties were taken to auction, with results reported for 311 properties. Of these, 166 were sold, resulting in a 53% clearance rate. The total auction value reached AUD 183,807,888, with a median sale price of AUD 1,391,000.

Melbourne: A total of 692 properties were taken to auction, with results reported for 464 properties. Of these, 253 were sold, resulting in a 55% clearance rate. The total auction value reached AUD 170,581,700, with a median sale price of AUD 850,000.