RBA cut ‘straps rocket' to property market
The Reserve Bank of Australia's latest interest rate cut has given Aussie homeowner's plenty of reason to rejoice.
However, experts warn Tuesday's decision could prove to be a double edged sword that could see investors dominate the market, while first home buyers continued to feel the housing squeeze.
Money expert and mortgage broker Julian Finch, founder and CEO of Finch Financial, said while rate cuts were often perceived as a means to enhance housing affordability, they typically had the opposite effect.
'People think rate cuts will make housing more affordable, but they rarely do,' he said.
'They drive demand, increase borrowing power and send prices up.
'That's what we're seeing now and it's only going to intensify if the RBA cuts again.'
The RBA on Tuesday cut the cash rate by a quarter point to 3.85 per cent in a bid to ease pressure on mortgage holders, grappling with high living costs and elevated interest repayments.
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The RBA's Michele Bullock during a press conference following the board's announcement to cut the interest rate by 0.25 percentage points. Picture: NewsWire / Nikki Short
On an average Aussie loan of just above $600,000, a single rate cut of 0.25 per cent will save about $1200 a year, while the latest cut could provide savings of around $2400 a year.
With at least one additional rate cut likely by year's end, Mr Finch said the RBA's next move would have a significant psychological effect on the market, including the likely impact on the structural imbalance between supply, demand and access.
'We may get one more rate cut, but that won't fix affordability. What's needed is smarter housing policy, increased supply and lending practices that prioritise long-term stability over short-term boosts,' he said.
'Another cut might keep the economy moving but if it fuels another property price surge, we risk leaving more Australians behind.'
Leading finance expert and CEO of Finch Financial Services Julian Finch.
Mr Finch said the latest RBA cut had investors and cashed up buyers laughing all the way to the bank.
'The latest RBA move has already kickstarted the market and another rate cut is going to strap a rocket to it. Affordability is going to get worse, not better,' he said.
'Investors are in a stronger position to move quickly; they understand the game. A rate cut opens the door for them to re-enter, refinance and scale.
'Meanwhile, first home buyers are trying to keep up while facing rising prices and intense competition for limited stock.'
Mr Finch urged borrowers to avoid emotional decisions based on rate movement hype and instead focus on long-term strategy and sustainability.
'If you're buying, don't just ask how much you can borrow, ask how much you can comfortably repay if rates shift back up in the next two or three years,' he said.
'If you already have a mortgage, now is the time to renegotiate, refinance or explore fixing part of your loan. Don't wait for the next rate change to act.'
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The Advertiser
2 hours ago
- The Advertiser
Home solar battery contracts ripped up as promised government rebate ditched
Households in NSW promised federal and state government discounts on a new home solar battery have been told they are no longer eligible for both and will need to start from scratch. Australians with rooftop solar rushed to take advantage of the new federal "cheaper home batteries" discount - worth about $4000 on a typical 11.5kWh battery - in the wake of Labor's May election win. Many installers took orders and started fitting batteries on the basis the federal rebate could be claimed after July 1 on top of any state schemes. But the NSW government on June 10 announced it was scrapping its existing discount after only seven months. Instead, it decided to expand a program to encourage households to sell power stored in batteries back to the market through virtual power plants. This left installers with a lot difficult phone calls to make to battery customers who they'd promised would receive both the state Peak Demand Reduction Scheme (PDRS) discount and the federal rebate on new batteries. Some customers who had not yet had a battery fitted were offered refunds on their deposits, or new quotes with the NSW discount - sometimes worth thousands of dollars - removed. "There have been no circumstances where people can claim solar battery installation incentives under both the commonwealth and NSW schemes," a spokesman for the NSW energy department said. "We recommend that households and small businesses contact their installer to discuss any quote that claimed both incentives would apply." Installers would likely have to bear the cost of the state discount they expected where households had already paid for, and received, their battery. Solar Battery Group, which operates nationally and has been installing 40 batteries a day since the government's re-election on May 3, was one of those. "If the customer is adamant they don't want to change the size of battery or the specifications, then yes, we will wear it," chief executive James Hetherington said. "We've had a lot of people wanting finance that are very confused because those [NSW] laws changed." Mr Hetherington said each business made a choice about how to respond to the federal funding - but new policy "hand grenades" were coming thick and fast across the country. "They did warn all of us: 'Install at your own risk'," he said. "They made that quite clear and we all made our own individual decisions on what risks we were going to take based on our own margins, on our own business models." He said the industry was moving very fast. "It's never moved like this in its history with batteries. "It's had this, obviously, many times with solar and solar panels, but the battery industry is not used to this, so it's got a few growing pains in the next six months," Mr Hetherington said. A spokeswoman for Energy Minister Chris Bowen said the federal battery discount was always designed to be used in conjunction with state incentives. "We designed the cheaper home batteries program to be stackable with state incentives, and it is," she said. "NSW are now also offering a battery incentive, for joining virtual power plants, which is stackable with ours. "The design and balance of NSW incentives is a matter for them, but giving more people more support to get batteries and join [virtual power plants] is good news for the industry." But the industry at a wider level was nonetheless disappointed in the cancellation of the NSW battery installation discount. "The announcement of the new NSW scheme was not the outcome they had expected or wanted," Smart Energy Council acting chief executive Wayne Smith said. "Industry has been operating under a great deal of uncertainty as they awaited clarity around the NSW PDRS that's caused considerable pain for many," he said. "The cuts to the scheme will continue to cause pain." RESINC Solar and Batteries founder Leigh Storr did not offer customers both NSW and federal installation discounts. "I feel for any installers who've jumped the gun," he said. "What they've been selling on is hope." He said the cheaper home batteries discount was a large enough incentive on its own to encourage battery take up. "I'm in huge support of what Chris Bowen has done," Mr Storr said. The PDRS scheme in NSW, which delivered about 11,000 rebates in first six months of the program, will be scrapped after June 30. Instead households with batteries are eligible for up to $1500 to help more connect to virtual power plants, which take customers' excess energy stored in batteries and sell it on. "From 1 July the NSW Peak Demand Reduction Scheme (PDRS) incentives for installing a battery will be suspended, but the consumers will have access to higher incentives under the commonwealth cheaper home batteries program," an NSW energy department spokesman said. "Incentives under the NSW PDRS to connect batteries to virtual power plants (VPPs) will almost double, and can be stacked with the commonwealth program." Any new batteries cannot be turned on before July 1 in order to be eligible for the federal discount under the $2.3 billion cheaper home batteries program. Households in NSW promised federal and state government discounts on a new home solar battery have been told they are no longer eligible for both and will need to start from scratch. Australians with rooftop solar rushed to take advantage of the new federal "cheaper home batteries" discount - worth about $4000 on a typical 11.5kWh battery - in the wake of Labor's May election win. Many installers took orders and started fitting batteries on the basis the federal rebate could be claimed after July 1 on top of any state schemes. But the NSW government on June 10 announced it was scrapping its existing discount after only seven months. Instead, it decided to expand a program to encourage households to sell power stored in batteries back to the market through virtual power plants. This left installers with a lot difficult phone calls to make to battery customers who they'd promised would receive both the state Peak Demand Reduction Scheme (PDRS) discount and the federal rebate on new batteries. Some customers who had not yet had a battery fitted were offered refunds on their deposits, or new quotes with the NSW discount - sometimes worth thousands of dollars - removed. "There have been no circumstances where people can claim solar battery installation incentives under both the commonwealth and NSW schemes," a spokesman for the NSW energy department said. "We recommend that households and small businesses contact their installer to discuss any quote that claimed both incentives would apply." Installers would likely have to bear the cost of the state discount they expected where households had already paid for, and received, their battery. Solar Battery Group, which operates nationally and has been installing 40 batteries a day since the government's re-election on May 3, was one of those. "If the customer is adamant they don't want to change the size of battery or the specifications, then yes, we will wear it," chief executive James Hetherington said. "We've had a lot of people wanting finance that are very confused because those [NSW] laws changed." Mr Hetherington said each business made a choice about how to respond to the federal funding - but new policy "hand grenades" were coming thick and fast across the country. "They did warn all of us: 'Install at your own risk'," he said. "They made that quite clear and we all made our own individual decisions on what risks we were going to take based on our own margins, on our own business models." He said the industry was moving very fast. "It's never moved like this in its history with batteries. "It's had this, obviously, many times with solar and solar panels, but the battery industry is not used to this, so it's got a few growing pains in the next six months," Mr Hetherington said. A spokeswoman for Energy Minister Chris Bowen said the federal battery discount was always designed to be used in conjunction with state incentives. "We designed the cheaper home batteries program to be stackable with state incentives, and it is," she said. "NSW are now also offering a battery incentive, for joining virtual power plants, which is stackable with ours. "The design and balance of NSW incentives is a matter for them, but giving more people more support to get batteries and join [virtual power plants] is good news for the industry." But the industry at a wider level was nonetheless disappointed in the cancellation of the NSW battery installation discount. "The announcement of the new NSW scheme was not the outcome they had expected or wanted," Smart Energy Council acting chief executive Wayne Smith said. "Industry has been operating under a great deal of uncertainty as they awaited clarity around the NSW PDRS that's caused considerable pain for many," he said. "The cuts to the scheme will continue to cause pain." RESINC Solar and Batteries founder Leigh Storr did not offer customers both NSW and federal installation discounts. "I feel for any installers who've jumped the gun," he said. "What they've been selling on is hope." He said the cheaper home batteries discount was a large enough incentive on its own to encourage battery take up. "I'm in huge support of what Chris Bowen has done," Mr Storr said. The PDRS scheme in NSW, which delivered about 11,000 rebates in first six months of the program, will be scrapped after June 30. Instead households with batteries are eligible for up to $1500 to help more connect to virtual power plants, which take customers' excess energy stored in batteries and sell it on. "From 1 July the NSW Peak Demand Reduction Scheme (PDRS) incentives for installing a battery will be suspended, but the consumers will have access to higher incentives under the commonwealth cheaper home batteries program," an NSW energy department spokesman said. "Incentives under the NSW PDRS to connect batteries to virtual power plants (VPPs) will almost double, and can be stacked with the commonwealth program." Any new batteries cannot be turned on before July 1 in order to be eligible for the federal discount under the $2.3 billion cheaper home batteries program. Households in NSW promised federal and state government discounts on a new home solar battery have been told they are no longer eligible for both and will need to start from scratch. Australians with rooftop solar rushed to take advantage of the new federal "cheaper home batteries" discount - worth about $4000 on a typical 11.5kWh battery - in the wake of Labor's May election win. Many installers took orders and started fitting batteries on the basis the federal rebate could be claimed after July 1 on top of any state schemes. But the NSW government on June 10 announced it was scrapping its existing discount after only seven months. Instead, it decided to expand a program to encourage households to sell power stored in batteries back to the market through virtual power plants. This left installers with a lot difficult phone calls to make to battery customers who they'd promised would receive both the state Peak Demand Reduction Scheme (PDRS) discount and the federal rebate on new batteries. Some customers who had not yet had a battery fitted were offered refunds on their deposits, or new quotes with the NSW discount - sometimes worth thousands of dollars - removed. "There have been no circumstances where people can claim solar battery installation incentives under both the commonwealth and NSW schemes," a spokesman for the NSW energy department said. "We recommend that households and small businesses contact their installer to discuss any quote that claimed both incentives would apply." Installers would likely have to bear the cost of the state discount they expected where households had already paid for, and received, their battery. Solar Battery Group, which operates nationally and has been installing 40 batteries a day since the government's re-election on May 3, was one of those. "If the customer is adamant they don't want to change the size of battery or the specifications, then yes, we will wear it," chief executive James Hetherington said. "We've had a lot of people wanting finance that are very confused because those [NSW] laws changed." Mr Hetherington said each business made a choice about how to respond to the federal funding - but new policy "hand grenades" were coming thick and fast across the country. "They did warn all of us: 'Install at your own risk'," he said. "They made that quite clear and we all made our own individual decisions on what risks we were going to take based on our own margins, on our own business models." He said the industry was moving very fast. "It's never moved like this in its history with batteries. "It's had this, obviously, many times with solar and solar panels, but the battery industry is not used to this, so it's got a few growing pains in the next six months," Mr Hetherington said. A spokeswoman for Energy Minister Chris Bowen said the federal battery discount was always designed to be used in conjunction with state incentives. "We designed the cheaper home batteries program to be stackable with state incentives, and it is," she said. "NSW are now also offering a battery incentive, for joining virtual power plants, which is stackable with ours. "The design and balance of NSW incentives is a matter for them, but giving more people more support to get batteries and join [virtual power plants] is good news for the industry." But the industry at a wider level was nonetheless disappointed in the cancellation of the NSW battery installation discount. "The announcement of the new NSW scheme was not the outcome they had expected or wanted," Smart Energy Council acting chief executive Wayne Smith said. "Industry has been operating under a great deal of uncertainty as they awaited clarity around the NSW PDRS that's caused considerable pain for many," he said. "The cuts to the scheme will continue to cause pain." RESINC Solar and Batteries founder Leigh Storr did not offer customers both NSW and federal installation discounts. "I feel for any installers who've jumped the gun," he said. "What they've been selling on is hope." He said the cheaper home batteries discount was a large enough incentive on its own to encourage battery take up. "I'm in huge support of what Chris Bowen has done," Mr Storr said. The PDRS scheme in NSW, which delivered about 11,000 rebates in first six months of the program, will be scrapped after June 30. Instead households with batteries are eligible for up to $1500 to help more connect to virtual power plants, which take customers' excess energy stored in batteries and sell it on. "From 1 July the NSW Peak Demand Reduction Scheme (PDRS) incentives for installing a battery will be suspended, but the consumers will have access to higher incentives under the commonwealth cheaper home batteries program," an NSW energy department spokesman said. "Incentives under the NSW PDRS to connect batteries to virtual power plants (VPPs) will almost double, and can be stacked with the commonwealth program." Any new batteries cannot be turned on before July 1 in order to be eligible for the federal discount under the $2.3 billion cheaper home batteries program. Households in NSW promised federal and state government discounts on a new home solar battery have been told they are no longer eligible for both and will need to start from scratch. Australians with rooftop solar rushed to take advantage of the new federal "cheaper home batteries" discount - worth about $4000 on a typical 11.5kWh battery - in the wake of Labor's May election win. Many installers took orders and started fitting batteries on the basis the federal rebate could be claimed after July 1 on top of any state schemes. But the NSW government on June 10 announced it was scrapping its existing discount after only seven months. Instead, it decided to expand a program to encourage households to sell power stored in batteries back to the market through virtual power plants. This left installers with a lot difficult phone calls to make to battery customers who they'd promised would receive both the state Peak Demand Reduction Scheme (PDRS) discount and the federal rebate on new batteries. Some customers who had not yet had a battery fitted were offered refunds on their deposits, or new quotes with the NSW discount - sometimes worth thousands of dollars - removed. "There have been no circumstances where people can claim solar battery installation incentives under both the commonwealth and NSW schemes," a spokesman for the NSW energy department said. "We recommend that households and small businesses contact their installer to discuss any quote that claimed both incentives would apply." Installers would likely have to bear the cost of the state discount they expected where households had already paid for, and received, their battery. Solar Battery Group, which operates nationally and has been installing 40 batteries a day since the government's re-election on May 3, was one of those. "If the customer is adamant they don't want to change the size of battery or the specifications, then yes, we will wear it," chief executive James Hetherington said. "We've had a lot of people wanting finance that are very confused because those [NSW] laws changed." Mr Hetherington said each business made a choice about how to respond to the federal funding - but new policy "hand grenades" were coming thick and fast across the country. "They did warn all of us: 'Install at your own risk'," he said. "They made that quite clear and we all made our own individual decisions on what risks we were going to take based on our own margins, on our own business models." He said the industry was moving very fast. "It's never moved like this in its history with batteries. "It's had this, obviously, many times with solar and solar panels, but the battery industry is not used to this, so it's got a few growing pains in the next six months," Mr Hetherington said. A spokeswoman for Energy Minister Chris Bowen said the federal battery discount was always designed to be used in conjunction with state incentives. "We designed the cheaper home batteries program to be stackable with state incentives, and it is," she said. "NSW are now also offering a battery incentive, for joining virtual power plants, which is stackable with ours. "The design and balance of NSW incentives is a matter for them, but giving more people more support to get batteries and join [virtual power plants] is good news for the industry." But the industry at a wider level was nonetheless disappointed in the cancellation of the NSW battery installation discount. "The announcement of the new NSW scheme was not the outcome they had expected or wanted," Smart Energy Council acting chief executive Wayne Smith said. "Industry has been operating under a great deal of uncertainty as they awaited clarity around the NSW PDRS that's caused considerable pain for many," he said. "The cuts to the scheme will continue to cause pain." RESINC Solar and Batteries founder Leigh Storr did not offer customers both NSW and federal installation discounts. "I feel for any installers who've jumped the gun," he said. "What they've been selling on is hope." He said the cheaper home batteries discount was a large enough incentive on its own to encourage battery take up. "I'm in huge support of what Chris Bowen has done," Mr Storr said. The PDRS scheme in NSW, which delivered about 11,000 rebates in first six months of the program, will be scrapped after June 30. Instead households with batteries are eligible for up to $1500 to help more connect to virtual power plants, which take customers' excess energy stored in batteries and sell it on. "From 1 July the NSW Peak Demand Reduction Scheme (PDRS) incentives for installing a battery will be suspended, but the consumers will have access to higher incentives under the commonwealth cheaper home batteries program," an NSW energy department spokesman said. "Incentives under the NSW PDRS to connect batteries to virtual power plants (VPPs) will almost double, and can be stacked with the commonwealth program." Any new batteries cannot be turned on before July 1 in order to be eligible for the federal discount under the $2.3 billion cheaper home batteries program.
West Australian
3 hours ago
- West Australian
New report reveals Aussie women are bearing the brunt of rising costs widening the retirement gap
A new report reveals Australian women are bearing the brunt of the nation's cost of living crisis and are sacrificing their own financial futures to keep households afloat. Insights Exchange's Consumer Trends report found women were excessively squeezed by rising living costs and family obligations that were causing stress, worry and anxiety. Researchers surveyed 1474 Australians finding women were 21 per cent less confident than men about their retirement, with only 27 per cent feeling positive about their financial future. More than half of the women surveyed said their ability to meet household expenses had worsened over the past year. The report found 43 per cent of Australians supported dependent children and ageing parents but women carried most of the responsibility. Insights Exchange chief executive officer Nichola Quail said when women were meant to be most financially stable, they were caught between caregiving and rising costs leaving little room to think beyond the next bill. 'It is a national issue hiding in plain sight,' she said. 'It's not just stressful; it's unsustainable.' One female respondent aged 56 said she could not see herself surviving until retirement. 'I don't eat to ensure I pay my rent. My electricity is about to be disconnected,' she said in the report. One woman aged 57 said the cost of living crisis had left her with a general feeling of hopelessness. While another women aged 38 said being able to afford to live a comfortable life without working insane hours was a big struggle that would only get worse. 'Female caregivers experience heightened financial vulnerability and workplace anxiety while navigating complex social connections,' the report stated. 'These patterns suggest women are carrying a heavier psychological burden, potentially exacerbated by financial stressors and societal responsibilities.'
Sydney Morning Herald
4 hours ago
- Sydney Morning Herald
Brace yourself: Energy, internet and insurance price rises are coming
In this world, nothing is certain except death and taxes – and price rises. Australians have been warned to brace for heftier household bills due to begin next month – or, in some instances, have already begun. Although inflation has been steadily slowing since its peak in December 2022, pushed up by COVID-induced global supply chain knots and Russia's war on Ukraine, consumers will have to fork out more for essential expenses such as electricity, phone and internet bills, with energy and telco giants signalling price rises to begin on July 1. 'The financial year definitely aligns with significant price changes, but for different reasons,' said Finder personal finance spokesperson Sarah Megginson. 'For many businesses, the end of the financial year is a time to finalise their budgets, review their operational costs from the previous year, and forecast for the next 12 months. If their costs have increased, there's a good chance they're going to pass those increased costs on to customers.' Loading But retail industry consultant Trent Rigby said price rises were becoming less tied to these points of the year. 'I think previously, with customers, it was ingrained in their minds that it was a new year, or a new financial year, so it was probably easier to get that price rise through,' said Rigby. 'One thing we've noticed working with retailers is there's no methodology behind it. We're just seeing price rises throughout the year.'
