The Consumer Policy Research Centre (CPRC) has published data outlining the extent that cost of living pressures and rising rates have hit Victorian people's savings.
The report into the impact of housing stress surveyed 1,500 Victorians on their financial behaviour over the past six months, and found that both renters and mortgaged homeowners have been impacted significantly by inflation and the cash rate hikes.
Victorians are increasingly without emergency funds, delaying healthcare appointments and even skipping meals to try and save money.
The majority (78%) of mortgage holders reported they had seen their repayments increase in 2022, with around 14% revealing their monthly repayments had increased by more than $700.
Around half (48%) of renters reported rental increases in the same time period.
Renters on fixed term leases are protected from rapid rent increases, so the full impact on renters may not be felt until 2023.
The report found several tangible examples of the extent private saving in Victoria is being squeezed.
Emergency funds
It's a general rule of thumb that households have three to six months of living expenses to fall back on as a crisis fund, in case of a sudden change in employment, a medical emergency, and so on.
The CPRC data suggests that this is one of the sacrifices Victorian people are starting to make.
Roughly two in five mortgage holders (38%) and renters (43%) said that they wouldn't be able to raise more than $2,000 in an emergency.
For 10% of mortgage holders and 27% of renters, even raising $500 would be a struggle.
Financial difficulty
The report found other indicators that a significant proportion of Victoria were experiencing poor financial wellbeing.
Of those surveyed, 13% had borrowed money or resources from friends or family in the last 6 months.
Another 13% had pawned or sold household goods.
Nearly one in ten (8%) had paid extra interest or fees on a loan because their repayments were late.
Medication, food and air conditioning
On the more severe end of the spectrum, the CPRC also reported several indicators of "acute financial difficulty".
Many Victorians reported that they had had to make concessions on their medical care, with 19% delaying dental care and 15% delaying a visit to their GP or medical specialist due to cost.
A further 6% were unable to afford their prescription medication.
Some even had to compromise on the most basic of necessities, with 9% of respondents reporting they had skipped a meal due to costs, and 6% unable to heat or cool their house.
CPRC CEO Erin Turner said this was the most disconcerting of the report's findings.
"[Most] alarming is the proportion already missing meals and delaying medical appointments due to cost," Ms Turner said.
"This is particularly worrying as the full impact of the latest rate rises won’t flow through to mortgage repayments after Christmas and many rental contracts come up for renewal in the new year.”
About 5% of respondents had also accessed community health or emergency relief.
Ms Turner stressed the importance for those struggling to seek assistance as soon as possible.
“If you’re one of the many Victorians feeling the cost of living crunch, know that help is available," Ms Turner said.
"If you have a mortgage, speak to your bank about hardship options as early as you can
"Anyone struggling can also get help from a free and independent financial counsellor.”
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Brooke Cooper
Harry O'Sullivan
Alex Brewster
