Latest news with #Canstar
Yahoo
12 hours ago
- Business
- Yahoo
RBA interest rate cut 'all but nailed on' after ABS reveals key inflation data: 'Pull the trigger'
Homeowners could soon see another slice of mortgage relief delivered in just a few weeks after positive inflation data was released. The Australian Bureau of Statistics (ABS) revealed trimmed inflation, which is the metric the Reserve Bank of Australia (RBA) closely follows, fell from 2.9 per cent to 2.7 per cent, the lowest level since December 2021. That puts inflation in touching distance of the Board's desired midpoint of 2-3 per cent, and could help secure an interest rate cut at its August 11 and 12 meeting. Canstar's director of data and insights, Sally Tindall, told Yahoo Finance this result is the confirmation the RBA "has been waiting for". 'This, combined with the surprise lift in Australia's unemployment rate, should be more than enough for the RBA to pull the trigger on the third cash rate cut for the year," she said. RELATED Dark $95,420 property cloud looming for new buyers Centrelink pension warning for 4.3 million Aussies facing super nightmare Aussie couple reveal 'cheaper' $400,000 housing solution 'Inflation is cooling in key categories that have been cause for concern for the central bank. Services inflation is still too high, at an annual rate of 3.3 per cent, but it's now at the lowest level since June 2022. Canstar found a homeowner with a $600,000 mortgage would save $90 per month with a 0.25 per cent cut next month. That goes up to $150 per month with a $1 million mortgage. eToro market analyst Josh Hilbert said this latest data point is making it "harder" for the RBA to keep holding interest rates. "After the surprise pause in July, today's data means an August rate cut is all but nailed on," he added. He said markets have priced in a 93 per cent chance of a cut next month, and cited how cost-of-living pressures on homeowners would mount more pressure on the RBA to provide some relief. But he hinted there might not be much more movement in the cash rate for several months."The RBA's inflation fight looks all but won, and the board has a narrow window to move before downside risks mount further," Gilbert said. "The RBA's measured approach so far means that following a cut in August, we may only see one further cut until the end of the year. Nonetheless, rates are coming down, and that's a win for equity markets and mortgage holders." Commonwealth Bank (CBA), Westpac, NAB and ANZ all believe the RBA will cut interest rates next month. But they're divided on how many more there will be in this cutting cycle. CBA and ANZ predict there will be two additional cuts coming, which would bring the cash rate down to 3.35 per cent. NAB thinks there will be three, while Westpac is the outlier with four predicted reductions in the cash rate. That would bring the rate down to 2.85 per cent. Why the RBA held rates in July The RBA shocked experts and homeowners earlier this month when it decided to hold interest rates at 3.85 per cent. The Big Four banks all thought the July meeting would have concluded with a cut. However, the Board said concerns around unemployment and lack of broader inflation data made them play it safe. The jobless rate jumped to 4.3 per cent in June and beat market expectations of 4.1 per cent. The RBA only had monthly CPI data to work with when members met over July 7 and 8, but today's inflation data release spans across April, May, and June. This gives the RBA a much better snapshot with where inflation is headed. KPMG chief economist Brendan Rynne agreed the RBA should have everything it needed to cut interest rates. 'Consumer and business confidence has continued to remain in the doldrums, with households and investors looking for continued rate relief before they open their wallets further,' he said. AMP chief economist Shane Oliver said if the inflation reading for the June quarter came in at 2.8 or 2.9 per cent, the RBA would likely hold rates again and wait until there was decent enough downward movement. Buyer warning ahead of another possible interest rate cut Scott Kuru, CEO of property advisory firm Freedom Property Investors, warned prospective buyers shouldn't twiddle their fingers if they wanted to avoid higher prices. 'We've seen home prices rise 1.8 per cent across the capital cities over the last quarter, with all cities up and Brisbane and Perth starring with 2.3 per cent and 2.4 per cent growth," he said, which he estimated meant annual price growth of 7 to 10 per cent. 'We're seeing some of the strongest auction clearance rates in years.' 'Home buyers and investors realise there's only a small window before we see the end of affordable property in Australia,' 'They're not waiting for the RBA - they're acting with their feet."Sign in to access your portfolio
Courier-Mail
14 hours ago
- Business
- Courier-Mail
Shock as lenders slash rates to lowest level in 2 years off cycle
Aussie homeowners are in for a treat as variable interest rates plunge to their lowest level in two years, a full two weeks ahead of the next Reserve Bank meeting. The dramatic milestone came even before the Wednesday quarterly consumer price index release – data that will determine which way the RBA rolls come its monetary policy meeting on August 12. MORE: Millennial's secret $200k discounts revealed Unexpected suburbs lead home lending The Police Credit Union threw the cat among the pigeons by slashing variables to 4.99 per cent for owner-occupiers with a 20 per cent deposit – a significant milestone that hasn't been hit since July 2023, according to Canstar research. 'The lowest variable rate is now a fraction above the lowest fixed rates in the market, despite the high possibility of further cash rate cuts from the RBA,' according to Canstar data insights director Sally Tindall. Pressure is building for other providers to match that level out of the RBA cycle, with Horizon Bank and Pacific Mortgage Group offering rates of 5.24pc and 5.34pc respectively, while others like Homestar Finance, Australian Mutual Bank and RACQ are at 5.39pc. 'Variable home loan rates starting with a '4' are finally back on the table after a two-year hiatus,' Ms Tindall said. MORE: 'Creepy': Family splurges millions on haunted Aus house 'Rotten egg' mystery grips coast, and it's not sewers 'Police Credit Union might not be a big name brand, but with this move, it's dialled up the competition in the variable mortgage market by at least a couple of notches.' 'The fact that the lowest variable rate is already below the 5 per cent barrier before an RBA cut, will put pressure on other low-cost lenders to drop rates below this mark.' She said 'banks are sharpening their pencils to attract new customers. For anyone still sitting on a rate well into the 6's, it's a wake‑up call to get on the phone to your bank.' The rate cutting frenzy extended into fixed rates, which have tumbled in the past fortnight, with 13 lenders slashing at least one, including Australia's fifth-largest lender Macquarie by up to 0.20 percentage points, while Greater Bank's lowest 2- and 3-year fixed rates are at just 4.94pc. MORE: All the tax write offs Aussies can claim ATO's dragnet: Millions of side hustles face shock tax bill Canstar figures show 17 lenders now have at least one fixed rate under 5pc, but Ms Tindall warned those who were thinking about fixing now needed to 'understand the trade‑offs – you might be buying peace of mind, but it could come at a cost if rates fall faster than expected'. She said 'fixed rates continue to tumble as banks jostle for pole position, but that doesn't mean everyone should rush to lock in'. 'Banks are dangling sharp fixed rates in front of borrowers chasing short‑term certainty, but with RBA cash rate cuts still on the table, potentially as early as 12 August, fixing could be a gamble.' MORE: Cash-strap student turns $40k to 38 homes Govt pays $3.3m for unliveable derelict house
News.com.au
15 hours ago
- Business
- News.com.au
Shock as lenders slash rates to lowest level in 2 years off cycle
Aussie homeowners are in for a treat as variable interest rates plunge to their lowest level in two years, a full two weeks ahead of the next Reserve Bank meeting. The dramatic milestone came even before the Wednesday quarterly consumer price index release – data that will determine which way the RBA rolls come its monetary policy meeting on August 12. Unexpected suburbs lead home lending The Police Credit Union threw the cat among the pigeons by slashing variables to 4.99 per cent for owner-occupiers with a 20 per cent deposit – a significant milestone that hasn't been hit since July 2023, according to Canstar research. 'The lowest variable rate is now a fraction above the lowest fixed rates in the market, despite the high possibility of further cash rate cuts from the RBA,' according to Canstar data insights director Sally Tindall. Pressure is building for other providers to match that level out of the RBA cycle, with Horizon Bank and Pacific Mortgage Group offering rates of 5.24pc and 5.34pc respectively, while others like Homestar Finance, Australian Mutual Bank and RACQ are at 5.39pc. 'Variable home loan rates starting with a '4' are finally back on the table after a two-year hiatus,' Ms Tindall said. 'Rotten egg' mystery grips coast, and it's not sewers 'Police Credit Union might not be a big name brand, but with this move, it's dialled up the competition in the variable mortgage market by at least a couple of notches.' 'The fact that the lowest variable rate is already below the 5 per cent barrier before an RBA cut, will put pressure on other low-cost lenders to drop rates below this mark.' She said 'banks are sharpening their pencils to attract new customers. For anyone still sitting on a rate well into the 6's, it's a wakeâ€'up call to get on the phone to your bank.' The rate cutting frenzy extended into fixed rates, which have tumbled in the past fortnight, with 13 lenders slashing at least one, including Australia's fifth-largest lender Macquarie by up to 0.20 percentage points, while Greater Bank's lowest 2- and 3-year fixed rates are at just 4.94pc. Canstar figures show 17 lenders now have at least one fixed rate under 5pc, but Ms Tindall warned those who were thinking about fixing now needed to 'understand the tradeâ€'offs – you might be buying peace of mind, but it could come at a cost if rates fall faster than expected'. She said 'fixed rates continue to tumble as banks jostle for pole position, but that doesn't mean everyone should rush to lock in'. 'Banks are dangling sharp fixed rates in front of borrowers chasing shortâ€'term certainty, but with RBA cash rate cuts still on the table, potentially as early as 12 August, fixing could be a gamble.'
News.com.au
2 days ago
- Business
- News.com.au
Energy bills: price gaps between providers revealed
Homeowners and renters have been told to check their next energy bill as it is likely to be a fair amount higher amid rate changes across various networks and uneven deals in the market. Increases in energy charges came into effect over July and will affect hundreds of thousands of Aussies. For most, the increases will be about 25 per cent. But Canstar analysis revealed the rises have not applied equally across networks. This has led to vast differences among provider charges, with some lower cost electricity suppliers offering rates that would work out to be about $500 a year cheaper than the industry average, Canstar noted. Canstar insights director Sally Tindall said the price gaps were often the result of differences in the size of each energy network, which meant they were passing on costs in varying ways. 'The cost of electricity is made up of a number of different factors. While wholesale costs is one of them – which is the price paid to generators for energy – there is also network costs, retailer costs and environmental costs,' Ms Tindall said. 'The increase in many of these costs is, unfortunately, resulting in higher energy bills.' Canstar revealed that some of the biggest price variances were across NSW, Queensland and Victoria. The lowest cost plans in NSW from Essential Energy and Endeavour Energy were about $507 and $460 cheaper annually than the industry average, the comparison group found. In Queensland, Energex's lowest cost plan was about $444 a year cheaper than the industry average. Victorian households could get electricity rates at about $314-$358 cheaper than the industry norm on the lowest cost plans from Ausnet, Citipower, Powercor and United Energy, the Canstar analysis showed. Ms Tindall added that price changes this month were significant – albeit lower than those recorded over 2022, when the start of the Ukraine War and other factors sparked a global surge in energy prices. 'High demand for electricity, weather events and, on occasion, coal station outages over the last year have had an impact on wholesale prices,' Ms Tindall said. 'Network costs, that is, the cost of transporting energy to your home, is a major component of (prices). Depending on the network you're on, these costs can form up to 48 per cent of an electricity bill.' Compare the Market's economic director David Koch said July increases in electricity costs would impact around 800,000 households on standing offers. These customers were simply 'paying too much', he said. 'If you're on the standing offer, chances are you're already paying more than you need to for the very same electricity supply as your neighbours,' Mr Koch said. 'We know 80 per cent of households in the National Energy Market are overpaying for electricity because in so many cases there are better deals out there.' Recent energy price increases reflect ongoing cost pressures on providers, Mr Koch said. 'Wholesale prices only account for roughly a third of your energy bill, and regulators consider an array of other factors when determining prices,' Mr Koch said. 'Firstly, network costs continue to rise for retailers. The cost of materials to maintain the network has increased and it's costing more for distributors to read meters, maintain poles, wires and pipes and transform the grid. 'People may not realise that there's also a cost involved in meeting renewable energy targets. Outdated electricity grids and networks have been expensive to maintain and will cost even more to transform over the next 10 years. 'It's regular Aussie families who will bear the brunt as some of these costs are passed on. 'None of these changes will happen overnight, so we could face a long, protracted period of price pressure.'
Sydney Morning Herald
21-07-2025
- Business
- Sydney Morning Herald
Justin has $300,000 in the bank but can't get a home loan
While Flowers was told he could borrow $200,000, the total would not let him buy a home that suited his life. 'It's not practical for me to buy a property in a regional area or small apartment – I have kids I want to see every day.' A 2024 report by Swinburne University of Technology found about 508,000 people aged 55-plus were at risk of 'non-supported housing precarity' in 2019-20 – neither poor enough to qualify for housing assistance nor wealthy enough to buy. 'The problem is, after they go through that first hurdle of being approved by the government, they have to find finance from the bank … which introduces its own restrictions about not lending to older people,' say report co-authors Dr Piret Veeroja and Professor Wendy Stone. 'The governments can provide the settings, regulations and the motivation for the finance sector to reduce its discrimination against older people … really bringing the financial sector on board is a necessary part of the puzzle,' Stone says. Stone says shared equity schemes can work well for some, but older applicants they've spoken to who may be eligible face more complex hurdles. Stone says the aged pension rate is 'set on the assumption that people don't have that large housing cost in retirement'. 'But it's impossible to afford a mortgage or find anything that's affordable in a private market on that payment,' she said. Sally Tindall, Canstar's data insights director, says the government could 'work out a scheme … [where] the bank is happy to take on additional risk for someone over 55.' She says government is canvassing solutions, including a reverse mortgage program and abovementioned housing initiatives, but says Help to Buy is 'probably geared towards younger Australians'. 'It could be a good avenue for all Australians, but more needs to be done,' she says. Tindall says the low uptake of the Family Home Guarantee, which offers 2 per cent deposit and requires a bigger loan, suggests it is not fit for purpose. 'People over 55 who don't have a steady stream of income and an exit strategy are not passing the banks' serviceability test, and the banks can't waive those tests because it's a lot more risk for them.' When ex-police officer Naomi Oakley, 56, divorced nine years ago, she had no savings and was raising three children on one wage. After years of saving, she had $70,000; she applied for a home loan and was rejected. She was devastated. Loading She eventually purchased a three-bedroom unit in Skye, outer south-eastern Melbourne – further from the city than she wanted and far from family and support networks. 'I don't go out for dinner and … getting my hair done is a luxury – you have to give up those small things to have a loan at my age,' Oakley says. 'I also think, 'oh god, I'm in my mid-50s, will I get ill before I pay it off?' But you just have to be positive.' A federal government spokesman says Labor's Help to Buy scheme 'will help Australians get into home ownership with as little as a 2 per cent deposit, and a much smaller mortgage – an important option for those who might need a shorter mortgage term'. 'For older renters, we're making renting more secure with 80,000 long, five-year lease rentals and through our Better Deal for Renters, which is ending no-grounds evictions and rent bidding,' he adds. Brendan Coates, a retirement income expert at Grattan Institute, says Help to Buy is only useful for wealthier renters on the brink of purchasing. 'It's useful for older renters who will often have a deposit but won't have enough time left in the workforce to pay off the loan,' he says. 'Most renters have less than $100,000 in savings – there's no way they can buy a home, particularly if they're approaching retirement.' Raising rent assistance by 50 per cent for singles and 40 per cent for couples should be a priority, Coates says. Shadow Minister for Housing and Homelessness, Andrew Bragg, said: 'The only way to increase home ownership is to boost housing supply. Under the Coalition, Australia was averaging 190,000 new homes per year. Under Labor, we're barely hitting 170,000 new homes per year. 'Labor's Home Guarantee Scheme is almost useless for many mature first home buyers who will be told 'no' by their lender.' Flowers hopes he can eventually buy something, even if it's to leave to his kids. 'I grew up hearing about Australia the lucky country – doesn't feel too lucky to me, and it won't be like that for our children.'
