More Australians are in saving mode compared to last year despite the high cost of living and a string of interest rate hikes.
Roughly 70 per cent of adults are saving for big ticket items such as a home, holiday or major renovation, up from 66 per cent last year, Canstar data shows.
Canstar's financial services group executive Steve Mickenbecker said mortgage holders, who have been enduring a sharp uptick in their monthly repayments as interest rates track higher, fell into two camps.
One was clearly in survival mode and funnelling any extra money into their emergency fund, while a second was taking the tighter financial conditions in stride and saving for a holiday or other major purchase.
"For some borrowers, interest rate increases have been water off a duck's back, while others are in severe stress," Mr Mickenbecker said
Sixty per cent of mortgage holders were saving up for a holiday, with 38 per cent putting money towards their emergency funds.
While Australians are clearly determined to take a holiday now that the pandemic has fallen into the rear-view mirror, separate data from NAB found two in three had cancelled or postponed holidays in the past three months
When it comes to buying a home, the Canstar survey revealed a low appetite among borrowers to take on more housing-related debt.
But those without a mortgage were still hoping to work towards a deposit.
"With the potential for the cash rate to remain on hold, that day may be one step closer," Mr Mickenbecker said
The central bank board is due to meet on Tuesday ahead of its August cash rate meeting.
The RBA has fired off 12 interest rate hikes since May last year but opted to keep the cash rate on hold at 4.1 per cent at the last meeting.
The central bank is clearly approaching the end of its hiking cycle but another increase has not been ruled out in August.
Weaker-than-expected consumer prices and retail trade data will fuel the case for a second month on hold, whereas intense strength in the jobs market and services inflation could push the board towards another increase.
Interest rate markets see just a 10 per cent chance of a hike on Tuesday and economists from both NAB and ANZ expect the RBA to stay on hold.
But Commonwealth Bank and Westpac economist still foresee the bank moving 25 basis points higher.
© AAP 2023