Entertainment spending is increasing as we re-emerge from the pandemic

author-avatar By
on November 17, 2020
Entertainment spending is increasing as we re-emerge from the pandemic

Photo by Harpal Singh on Unsplash

Australians planned to spend more on entertainment in October, as national spending intentions steadily improved following the easing of Victorian restrictions.

The latest data from the Commonwealth Bank Household Spending Intentions (HSI) series for October shows a sizeable increase in spending intentions for entertainment purposes, such as streaming, gaming or sports.  

CBA Chief Economist Stephen Halmarick it was pleasing to see entertainment spending intentions pick-up in October, while home buying, retail, and travel spending intentions tracked sideways. 

"Within the recreation sector good increases were seen in spending on boat rentals, bowling alleys, pay-TV, digital books-movies-music & games, music stores and video arcades,” said Mr Halmarick.

However, the entertainment sector was still lagging somewhat when it came to art and galleries, live music and movie theatres.

Retail spending intentions continued to soften after some increases in previous months. 

There were some improvements in spending intentions on categories like grocery stores, department stores, furniture and office supplies as well as clothing stores, while weaknesses were evident in men's clothing, women's accessories and health and beauty spas. 

According to Mr Halmarick, October's mixed spending intentions are a result of the drag caused by Victorian shutdowns on the economy. 

“Notwithstanding this mixed result, other data points to an improvement in the Australian economy in the early stages of November," he said. 

CBAHSI1

Entertainment spending intentions. Source: CBA. 

To boost spending, the New South Wales Government today announced it would be giving $100 dollars worth of vouchers to every adult to kick start the struggling hospitality and entertainment sectors. 

"We want to encourage people to open up their wallets and contribute to the stimulus effect," NSW Treasurer Dom Perrottet told the ABC.

"The dining and entertainment industries were among the hardest hit by the pandemic and I would encourage people to utilise this scheme once it is up and running and to make sure they spend a bit extra on the way through, too."

Home buying intentions up 

CBA's series, which analyses customer behaviour from CBA’s transactions data as well as Google Trends search activity, also found that home loan spending intentions rose slightly in October, but have mostly tracked sideways since sharply recovering from April's lows.

"The November easing of monetary policy has led to a further reduction in a number of fixed mortgage rates," CBA's report said. 

"We expect these low interest rates to continue to provide support to home buying."

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner-occupiers.

Lender

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
UNLIMITED REDRAWSSPECIAL OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
More details
QLD/NSW/VIC/SA METRO & INNER REGIONAL AREAS
QLD/NSW/VIC/SA METRO & INNER REGIONAL AREAS

Variable Home Loan (Principal and Interest)

  • $5000 Cashback. T&Cs Apply.
Variable
More details
REFINANCE ONLY
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
REFINANCE ONLY

Variable Rate Home Loan – Refinance Only

  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Variable
More details
NO ONGOING FEESFREE REDRAW FACILITY
  • Rate Match Guarantee. Tic:Toc will match the rate on identical variable P&I home loans. T&C's Apply.
NO ONGOING FEESFREE REDRAW FACILITY

Live-in Variable Loan (Principal and Interest) (LVR < 90%)

  • Rate Match Guarantee. Tic:Toc will match the rate on identical variable P&I home loans. T&C's Apply.

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of June 30, 2022. View disclaimer.

More recently, Australian Bureau of Statistics (ABS) lending data shows new loan commitments rose 5.9% in September, excluding refinancing, with refinancing up 15%, in seasonally adjusted terms.

ANZ meanwhile recently retracted its prediction of house price falls in 2021, instead expecting a 9% rise in capital cities next year, indicating increased confidence in the market. 

“Spending on CBA credit/debit cards has picked up as the Victorian economy opens up. In addition, low interest rates are encouraging an increase in home loan applications, especially for fixed-rate mortgages by owner-occupiers," Mr Halmarick said.

"A stronger housing market should support spending intentions in the months ahead – as should the recent significant easing of monetary policy by the Reserve Bank of Australia."

See also: Card spending surges as Melbourne emerges from COVID lockdowns - CBA

Australian economy set for a strong recovery 

On Friday 13 November, Commbank's Head of Australian Economics Gareth Aird said Australia's economic recovery is going to be faster than previously expected.

“The Government’s fiscal support packages were designed to keep as much of the economic furniture intact so that when restrictions were eased activity could rebound swiftly," Mr Aird said. 

"It is clear that the economic data at the national level has improved since the middle of the year. Indeed we expect a decent bounce in GDP over the second half of this year to show up in the Q3 20 and Q4 20 national accounts.

“Provided transmission of COVID-19 in Australia remains low, particularly community transmission, the strength of the economic recovery in 2021 will surprise many."


Latest Articles

author-avatar
William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

Collections:

Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree
to the Savings Privacy Policy