Australian economy 'finely poised' as borrowers feel impact of 'unnecessary' rate rises

The past two interest rate rises by the RBA were unnecessary, a new report released by Deloitte Access Economics today has said.

Lead author and Deloitte Access Economics Partner Stephen Smith said in the business outlook report that the Australian economy is now ‘finely poised’ as economic growth slows to a trickle this year, the weakest since the recession of the early 1990s, outside pandemic conditions.

“Our view remains unchanged – the additional 50 basis points of increases earlier this year were unnecessary, and have prompted a further downgrade in Australia’s growth outlook,” Smith said. “That downgrade is centred on our households, and a ‘consumer recession’ is now forecast in 2023, with household spending expected to finish the year below where it started.”

While he said many mortgage holders were in a position to weather the interest rate rises, which will mean an increase in payments of $14,000 for a $600,000 when lenders pass on the full increases, a significant group were not. He said as many as 15 percent of variable rate, owner-occupier mortgage holders could be in negative cash flow by the end of 2023.

“On these numbers, at least 300,000 Australian households may currently be experiencing negative cash flow, with mortgage repayments and essential living expenses together exceeding household disposable income,” Smith said. “That should shock all of us.”

Smith said the pressures on the construction will also continue to impact the rental market, with commencement on new dwellings expected to be the lowest in a decade.

“Construction is expected to commence on significantly fewer houses and apartments compared to previous years – in fact, Deloitte Access Economics expects that 2023 will see construction commence on the fewest dwellings in more than a decade and almost 70,000 below the level commencements recorded in 2021,” Smith said.

“On these numbers, new housing supply would just barely keep pace with population growth, let alone ease what is a critical undersupply. In short, we are building far too few dwellings and, with a myriad of supply side challenges unresolved, that is unlikely to change in the near term.”

Deloitte Access Economics has revised expectations for economic growth down to 1.5 percent for this year and just 1.2 percent for 2024.

Italian fine wines are gaining momentum among Australian collectors and drinkers, with new data from showing a surge in interest driven by value, versatility and a new generation of producers.

Long dominated by France, the premium wine conversation is beginning to shift, with Italy increasingly positioned as a compelling alternative for both drinking and collecting.

According to Langtons, the category is benefiting from a combination of factors, including its breadth of styles, strong food affinity and more accessible price points compared to traditional European benchmarks.

“Italy has always offered fine wine fans an incredible range of wines with finesse, nuance, expression of terroir, ageability, rarity, and heritage,” said Langtons General Manager Tamara Grischy.

“There’s no doubt the Italian wine category is gaining momentum in 2026… While the French have long dominated the fine wine space in Australia, we’re seeing Italy become a strong contender as the go-to for both drinking and collecting.”

The shift is being reinforced by changing consumer preferences, with Langtons reporting increased demand for indigenous Italian varieties and lighter, food-first styles such as Nerello Mascalese from Etna and modern Chianti Classico.

This aligns with the broader rise of Mediterranean-style dining in Australia, where wines are expected to complement a wider range of dishes rather than dominate them.

Langtons buyer Zach Nelson said the category’s versatility is central to its appeal.

“Italian wines often have a distinct, savoury edge making them an ideal pairing for a variety of cuisines,” he said.

The move towards Italian wines also comes as prices for traditional French regions continue to climb, particularly in Burgundy, prompting collectors to look elsewhere for value without compromising on quality.

Italy’s key regions, including Piedmont and Etna, are increasingly seen as offering that balance, with premium wines available at comparatively accessible price points.

Nelson said value is now a defining factor for buyers in 2026.

“Value is the key driver for Australian fine wine consumers… Italian wines are offering exactly that at an impressive array of price points to suit any budget,” he said.

The category is also proving attractive for newer collectors, offering what Langtons describes as “accessible prestige” and a more open entry point compared to the exclusivity often associated with Bordeaux.

Wines such as Brunello di Montalcino and Nebbiolo-based expressions are increasingly being positioned as entry points into cellar-worthy collections, combining ageability with relative affordability.

At the same time, a new generation of Italian producers is reshaping the category, moving away from heavier, oak-driven styles towards wines that emphasise site expression and vibrancy.

“There’s definitely a ‘new guard’ of Italian winemaking… stripping away the makeup… to let the raw, vibrating energy of the site speak,” Nelson said.

Langtons is also expanding its offering in the category, including exclusive access to wines from family-owned producer Boroli, alongside a broader selection spanning Piedmont, Veneto, Sicily and Tuscany.

The company will showcase the category further at its upcoming Italian Collection Masterclass and Tasting in Sydney, featuring more than 50 wines from 23 producers across four key regions.

For collectors and drinkers alike, the message is clear: Italy may have been overlooked, but it is no longer under the radar.

Australian economy ‘finely poised’ as borrowers feel impact of ‘unnecessary’ rate rises

The latest Deloitte Access Economics report predicts growth to slow to lowest levels since the recession of the early 1990s

Italian wines are emerging as a serious contender for Australian collectors, offering depth, rarity and value as French benchmarks continue to climb.