Australia’s household spending continued to show resilience in June, rising more strongly than expected despite higher borrowing costs, according to new data from the Australian Bureau of Statistics (ABS). Household spending increased by 0.8% during the month to A$81.3 billion, well above economists’ expectations of a 0.2% rise, following a 1.2% increase in May. On an annual basis, spending growth accelerated to 6%, while real household spending for the June quarter rose 0.7%.

The standout performer was transport spending, driven by a sharp increase in new vehicle purchases, particularly electric vehicles (EVs). Households increasingly opted for EVs as persistently high petrol prices encouraged consumers to seek more fuel-efficient alternatives.

New vehicle sales pushed transport spending up by 3%, highlighting a shift in consumer preferences amid rising living costs. Spending also strengthened in recreation and culture, which climbed 1.4% on the back of higher purchases of electronic goods, live entertainment, and gambling activities associated with major sporting events.

Meanwhile, air travel spending recovered to levels seen before disruptions caused by the Middle East conflict earlier this year, while fuel spending volumes rose 7.8% as motorists took advantage of lower fuel prices.

The figures come as the Reserve Bank of Australia maintains its cash rate at 4.35% after three interest rate increases this year aimed at containing inflation.

Although higher rates have cooled the housing market and weighed on property prices, the latest spending data suggest consumers remain willing to spend, providing evidence that household demand has remained relatively resilient despite tighter monetary policy and ongoing cost-of-living pressures.