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Herald Sun
3 days ago
- Business
- Herald Sun
Experts divided: Cost-of-living crisis or housing havoc?
Has the cost-of-living crisis finally ended? Some of Australia's top finance and property experts certainly think so. Finder's latest RBA Cash Rate report, which surveyed 34 experts and economists on future cash rate moves and other issues relating to the state of the economy, showed 88 per cent (30 out of 34) respondents believe the RBA will cut the cash rate tomorrow, bringing it down to 3.60 per cent. On the topic of cost-of-living, almost half of experts (44 per cent) said they believed the crisis was over. In comes as the amount Aussies are saving each month – $932 – reached an all-time high in June 2025, up from $614 in June 2023, according to data from Finder's Consumer Sentiment Tracker. MORE NEWS When is the next RBA rates meeting in 2025? Shock salary you now need to buy a home Little-known rule could save you $800 Finder's data shows mortgage stress is also at a two-year low – down to 34 per cent. Despite higher average savings rates, Stella Huangfu from the University of Sydney noted that many were still doing it tough. 'Finder's research reveals that 43 per cent of respondents have less than $1000 in savings, and 18 per cent have no savings at all,' she said. 'Additionally, the cost of essential goods and services remains high. 'Experts predict that grocery prices are unlikely to decrease in 2025, and real household disposable income has declined by nearly 10 per cent since its peak, indicating that many Australians are still struggling to keep up with living expenses.' Graham Cooke, head of consumer research at Finder, said while some Australians were gaining financial confidence, others were barely scraping by. 'Whether the cost of living crisis is over really depends on who you ask,' he said. 'While Finder's Cost of Living Pressure Gauge shows that cost pressures are easing, rents are still sky-high and relief is being more directly felt by homeowners. 'The property class divide in Australia is widening.' However, Jakob Madsen from The University of Western Australia said the crisis was not as large as many believe. 'I think the so-called cost-of-living crisis is blown up and clearly not of the scale we saw in the 1970s and 1980s,' he said. 'Most remuneration is indexed to consumer prices, so the standard of living has not changed much. 'The exception is some rentiers and new entrants into the housing market have experienced marked increasing costs. But this is all caused by the escalation of house prices, not a general increase in the real value of pensions and wages.' Kyle Rodda from said the cost-of-living crisis was basically a housing crisis. 'If you rent, things are tough. If you are leveraged to your eyeballs on your home, things are tough. 'Given the housing problem is supply driven and there's not much being done to address that, then the 'crisis' is likely to continue.' Adj Prof Noel Whittaker from QUT pointed to a growing wealth divide. 'We are living in very much a two-tier society, and the gaps between the haves and the have-nots appear to be widening,' he said.
Yahoo
6 days ago
- Business
- Yahoo
$1,262 cash boost expected for homeowners with RBA set to cut interest rates in days
Millions of Australian mortgage holders could be getting more repayment relief next week. Experts are expecting the Reserve Bank of Australia (RBA) will cut the cash rate by 0.25 per cent on Tuesday, bringing it down to 3.60 per cent. If the banks pass on this cut in full, an Aussie homeowner with an average $659,920 home loan would save about $105 a month, or $1,262 a year. If you take into account all three rate cuts this year, the savings jump to $177 a month, or $2,129 a year. About 88 per cent of experts and economists surveyed by Finder believe the RBA will cut the cash rate in July. All of the Big Four bank economic teams are also forecasting a cut next week. RELATED ANZ changes RBA interest rate call as it jumps gun ahead of CBA, Westpac, ANZ with home loan cut Superannuation 'red alert' for millions as $1 billion in retirement savings feared lost Woolworths payment change hits dozens of supermarkets AMP chief economist Shane Oliver expects the RBA will cut rates again in July, August, November and February. 'Since the last meeting we have seen a further fall in inflation and weaker than expected GDP and economic activity data so the RBA is likely to continue returning the cash rate to around neutral,' he chief economist Matthew Peter said there was no reason for the RBA to wait and argued a July cut was "in the bag'. 'Underlying inflation is within the RBA's target band and falling, consumer spending is disappointing and the market is expecting a rate cut,' he said. However, four of the 34 experts surveyed are expecting a hold next week, including My Housing Market chief economist Andrew Wilson. 'Current rate settings have achieved a balance between growing consistency in maintaining the RBA's inflation target and a strong economy reflected in a robust and resilient labour market,' he argued. More than three-quarters of experts expect another rate cut in August, while 52 per cent are also predicting a cash rate cut in November. Commonwealth Bank and ANZ are expecting two more interest rate cuts in July and August, NAB is expecting three in July, August and November. Westpac thinks there will be four more cuts, including one in July, with the timing of the further three cuts depending on the RBA's post-meeting tone. A July rate cut remains a 'done deal' for markets, Westpac economist Jameson Coombes noted today, but the odds of a follow-up in August have slipped back to around 65 per cent after being as high as 80 per cent earlier in the week. Finder head of consumer research Graham Cooke said mortgage holders were waiting for more interest rate cuts. 'Finder's Cost of Living Pressure Gauge has dropped a little to 74 per cent, but it's still borderline extreme,' he said. Cooke said homeowners may be able to give themselves an extra rate cut by switching. 'If your home loan is over 5.5 after this cut, you're paying too much,' he said. If you are in a position to, keeping your repayments the same after your rate drops could help you get ahead on your home loan. 'Keeping your repayments steady means you'll chip away at the principal faster, saving thousands of dollars in interest over the life of your loan,' Cooke in to access your portfolio
