Rising interest rates, the persistent cost-of-living squeeze, and new government policies are all converging to make price sensitivity a defining feature of Australian spending in 2025. Whether you’re buying groceries, choosing a mortgage, or shopping for a new car, understanding price sensitivity can help you stretch your dollars further.
What Is Price Sensitivity—and Why Does It Matter Now?
Price sensitivity refers to how much a change in price affects consumers’ purchasing decisions. The more price-sensitive a buyer is, the more likely they are to change their behaviour in response to even small price changes. In 2025, this concept is more relevant than ever in Australia:
- Persistent inflation: Even as inflation has eased from its 2022-23 peak, essential costs like food, energy, and housing remain high.
- Rate rises bite: The Reserve Bank’s cash rate, holding steady at 4.35% as of June 2025, is putting pressure on mortgage holders and renters alike.
- Government interventions: Targeted cost-of-living relief (including energy rebates and expanded rent assistance) is helping some households, but not enough to reverse cautious spending habits.
Retailers are responding with more aggressive price matching, loyalty rewards, and discount cycles. But it’s not just the big supermarkets—price sensitivity is shifting how Australians approach everything from streaming subscriptions to major financial decisions.
How Price Sensitivity Shapes Everyday Decisions
Australians are scrutinising every dollar in new ways. Here’s how price sensitivity is playing out in 2025:
- Supermarket swaps: Research from Roy Morgan in March 2025 shows a record number of households switching from premium to home-brand products and shopping across multiple supermarkets to chase specials.
- Subscription trimming: With streaming, meal delivery, and fitness memberships all on the chopping block, many Aussies are auditing their ‘set and forget’ expenses—often for the first time in years.
- Big-ticket purchases: Demand for new cars, whitegoods, and electronics has softened, with buyers waiting for sales or considering refurbished items. Car sales data from the Federal Chamber of Automotive Industries shows a shift towards more affordable models and longer ownership cycles.
- Housing and finance: Price-sensitive buyers are driving growth in mortgage comparison services, and the rental market is seeing greater negotiation around price and inclusions.
Strategies for Navigating a Price-Sensitive Economy
Understanding price sensitivity can empower you to make smarter choices, not just save money. Here’s how Australians are using this trend to their advantage:
- Comparing everything: From health insurance to internet plans, savvy consumers are using aggregator sites and apps to pit providers against each other. In 2025, new open-data rules make switching even easier in sectors like energy and banking.
- Timing purchases: Shoppers are leveraging seasonal sales, end-of-financial-year clearances, and loyalty programs to score better deals. For example, EOFY sales on appliances and tech are increasingly popular among price-sensitive households.
- Negotiating and bundling: Whether it’s asking for a better rate on your home loan or bundling mobile, internet, and streaming services, negotiation is back in fashion. Banks and telcos are responding with more bespoke, retention-focused offers.
- Embracing second-hand: The second-hand economy is booming, with platforms like Facebook Marketplace and Gumtree reporting record listings for furniture, electronics, and even vehicles in 2025.
The Big Picture: Price Sensitivity and Your Financial Wellbeing
Price sensitivity isn’t just a consumer trend—it’s a mindset that can help you take control of your finances in uncertain times. By questioning ‘do I really need this?’ and ‘can I get a better deal?’, Australians are building resilience against inflation and economic shocks.
Looking ahead, expect price sensitivity to remain a central force in the Australian economy, influencing not just what we buy, but how we save and invest. With new technologies and data-sharing rules, the power is shifting towards the informed consumer.
