Latest news with #RebeccaPike
Daily Telegraph
21-05-2025
- Business
- Daily Telegraph
Rate cut reality check: 60pc of Aussies still struggling
A new survey has revealed that 60 per cent of Aussie borrowers are still experiencing financial strain despite recent interest rate cuts. Finder surveyed 1027 Aussies, of which 297 were mortgage holders, with three in five respondents still struggling to make ends meet, even after the Reserve Bank of Australia (RBA) cut the official cash rate to 3.85 percentage points at its most recent meeting, the first time it has been below 4 percentage points since May 2023. But that is still not enough for some borrowers, with Finder revealing that based on their findings, almost two million mortgage holders were still feeling the financial heat. 'Taking into account yesterday's rate cut, half of borrowers (50%) would still need two or more interest rate cuts to comfortably afford their mortgage, while 17 per cent – equivalent to 561,000 mortgage holders – would need five or more (cuts),' the survey found. 'Only one in three (32%) said they would be completely fine with their rate even before the cut. 'A further eight per cent said they only needed one cut to be comfortable, and they just got it.' It was further revealed that women (65%) were more likely than men (54%) to need a drop in their interest rate to comfortably afford their mortgage. Rebecca Pike, money expert at Finder, said millions of Australians were counting on multiple rate cuts to ease the pressure. 'We are moving in the right direction, but millions of mortgage holders will lose grip on their loan if interest rates don't keep steadily falling,' Pike said. 'Without significant rate cuts from the RBA, many will face serious financial strain by the new year.' Pike said many borrowers had drained emergency savings topping up their home loan and coping with the rising cost of living. 'Households are desperate for home loan relief in the form of multiple rate drops,' she said. 'If your provider is not competitive, now is the time to consider refinancing. 'We're beginning to see lower fixed rates emerge as variable rates fall and lenders ramp up competition for new business.' MORE: Stubborn bank's shock call after 'shame list' 'Stupid': Blunt warning amid RBA rate cut frenzy But while the rate cut will be welcomed by mortgage holders, it will likely be another cruel blow for those still trying to get a foot on the property ladder. SQM Research managing director Louis Christopher said the rate cut would send auction clearance rates soaring, predicting property prices to rise 10 per cent by the end of the calendar year. Mr Christopher said first-home buyers needed to get in before the back end of 2025. 'It is very likely housing prices will rise from here and continue into 2026,' Mr Christopher said. 'From today's rate cut and the one in March, first home buyers are in a better buying position compared to six months ago. 'Their purchasing and borrowing power has increased. However, if I am right about price rises, they will need to move quickly, otherwise they will be back to square one on affordability.' Barefoot investor Scott Pape said that while the rate cut would help those trying to pay off their mortgage, it would also see more of the 'wrong people' get into the housing market. 'If I was a young person right now I would be pretty pissed off,' Mr Pape told . RELATED: 'Pissed': Barefoot Investor takes aim at RBA amid predictions housing prices set to soar after rates cut
News.com.au
21-05-2025
- Business
- News.com.au
Rate cut reality check: 60pc of Aussies still struggling
A new survey has revealed that 60 per cent of Aussie borrowers are still experiencing financial strain despite recent interest rate cuts. Finder surveyed 1027 Aussies, of which 297 were mortgage holders, with three in five respondents still struggling to make ends meet, even after the Reserve Bank of Australia (RBA) cut the official cash rate to 3.85 percentage points at its most recent meeting, the first time it has been below 4 percentage points since May 2023. But that is still not enough for some borrowers, with Finder revealing that based on their findings, almost two million mortgage holders were still feeling the financial heat. 'Taking into account yesterday's rate cut, half of borrowers (50%) would still need two or more interest rate cuts to comfortably afford their mortgage, while 17 per cent – equivalent to 561,000 mortgage holders – would need five or more (cuts),' the survey found. 'Only one in three (32%) said they would be completely fine with their rate even before the cut. 'A further eight per cent said they only needed one cut to be comfortable, and they just got it.' It was further revealed that women (65%) were more likely than men (54%) to need a drop in their interest rate to comfortably afford their mortgage. Rebecca Pike, money expert at Finder, said millions of Australians were counting on multiple rate cuts to ease the pressure. 'We are moving in the right direction, but millions of mortgage holders will lose grip on their loan if interest rates don't keep steadily falling,' Pike said. 'Without significant rate cuts from the RBA, many will face serious financial strain by the new year.' Pike said many borrowers had drained emergency savings topping up their home loan and coping with the rising cost of living. 'Households are desperate for home loan relief in the form of multiple rate drops,' she said. 'If your provider is not competitive, now is the time to consider refinancing. 'We're beginning to see lower fixed rates emerge as variable rates fall and lenders ramp up competition for new business.' But while the rate cut will be welcomed by mortgage holders, it will likely be another cruel blow for those still trying to get a foot on the property ladder. SQM Research managing director Louis Christopher said the rate cut would send auction clearance rates soaring, predicting property prices to rise 10 per cent by the end of the calendar year. Mr Christopher said first-home buyers needed to get in before the back end of 2025. 'It is very likely housing prices will rise from here and continue into 2026,' Mr Christopher said. 'From today's rate cut and the one in March, first home buyers are in a better buying position compared to six months ago. 'Their purchasing and borrowing power has increased. However, if I am right about price rises, they will need to move quickly, otherwise they will be back to square one on affordability.' Barefoot investor Scott Pape said that while the rate cut would help those trying to pay off their mortgage, it would also see more of the 'wrong people' get into the housing market. 'If I was a young person right now I would be pretty pissed off,' Mr Pape told .
Yahoo
18-05-2025
- Business
- Yahoo
Money crisis sparks major Aussie exodus: 'Hundreds of dollars better off'
Thousands of Australians are leaving the bright lights of the big city behind as they try to cut down costs. New research from Finder has revealed that one in eight people surveyed had relocated away from a capital city in the last three years to get on top of their savings. The study found this exodus is far from over, with a further 1.5 million people tipped to move somewhere cheaper by 2028. Finder's money expert, Rebecca Pike, told Yahoo Finance the savings from ditching a city like Sydney can be huge. 'If you can continue earning what you were in a capital city, you will be hundreds of dollars better off every month," she said. Millennial leaves 'dream job' in Australia for cheap life overseas Daunting retirement 'squeeze' about to hit generation of Aussies: 'Hidden cost' Centrelink issues urgent Age Pension eligibility change warning: 'Double check' 'Banking that difference instead of just breaking even can lead to much greater wealth long-term.' Pike said Aussies are "sick of scraping by" after years of interest rate hikes, soaring rent prices, and increasingly expensive supermarket trips. Finder discovered that saving on living costs was the most popular reason for the city move, followed by people wanting to be able to save for a house (25 per cent), to save on mortgage or rent costs (14 per cent), and to be closer to family (14 per cent).The most popular relocation was to a regional city or town, while others opted for another cheaper capital city. 'There are plenty of budget suburbs delivering better value – households might just have to expand their search further out," Pike told Yahoo Finance. But she warned that moving somewhere cheaper might not necessarily equate to a better life. "It might not be worth [it]... if your quality of life diminishes or if you're then going to spend more on car costs driving to see friends or family that still live in the city," she said. Zoe Carney relocated from Melbourne to a small town on the way to Mildura to work as a rural teacher. She told Yahoo Finance the high cost of living was a major factor spurring her move and she's now saving an extra $150 per week. The biggest saving was in her rent. 'In Melbourne, I was spending about $400 a week... but I was also living in my own one-bedroom,' she said. 'Now, I have a two-bedroom unit with a courtyard so I have way more space now and this is only $320 a week." Fellow teacher Courtney McCrone moved back to her hometown of Temora in the Riverina region of New South Wales after living in Canberra and Wollongong. 'It's definitely a lot cheaper to live here compared to other places, with rent and general living expenses,' she told Yahoo Finance. 'When we were in Wollongong, I probably paid over double what we pay [for rent] here. So that's a huge difference. 'There's no way we could afford to build the house we are building, with the space we are going to have in any capital city. Small rural towns are a lot more affordable and you get more for your money as well." Finance influencer Tash Estchmann shared recently that a 28-year-old who moved from Sydney to Newcastle saw "massive savings" and they've been able to get on top of their financial goals much faster. Even though it's only two hours away from one of the most expensive capital cities, you can shave a lot off your expenses. They now spend around $400 per month on groceries, which is a third of what Finder said is the average for a single person at $616. Their rent is less than $500 per week, with the average Sydney unit rental price being a little over $700 per week, according to SQM Research. They're also forking out just $220 per month on fuel and tolls, when those same costs in Sydney are around $254 per week. Taking public transport only costs them $80 per month, which would be around $200 if they lived in Sydney. Commonwealth Bank recently revealed where people are deciding to settle after leaving the big smoke. Queensland's Sunshine Coast has been the most popular regional destination for nine consecutive quarters. Other Queensland communities like Gladstone, Fraser Coast, Mackay and Gympie and Toowoomba are also very popular, as are the Northern Rivers and the Southern Highlands regions in NSW, East Gippsland in Victoria, and Albany, Bunbury, Harvey, Capel and York in Western Australia. Regional Australia Institute (RAI) CEO Liz Ritchie said the regions are "the new frontier" for many chasing cheaper housing and quieter living. "People are enthusiastic about the career opportunities and lifestyle benefits it offers," she said. "It's happening all over the country. It's why we must ensure communities have the infrastructure, funding and support they need to ensure they can continue to welcome new residents.' Sydneysiders were the most likely to move to the regions, accounting for 59 per cent of net city outflows, however that is down from 65 per cent in the 2023 December quarter. Melburnians are increasingly on the move, with their migration up 5 per cent to 40 per cent compared to the year prior.
Daily Mail
09-05-2025
- Business
- Daily Mail
How Instagram lifestyles, sky-high bills and stagnant wages are financially dooming young Aussies
A financial expert has explained why younger Australians are finding it harder financially than the baby boomer generation - with rising costs and unrealistic lifestyle expectations playing a big role. Finder money expert Rebecca Pike said younger workers were less likely to be getting decent pay rises to keep pace with cost-of-living pressures. 'There's obviously kind of generational differences in that as well,' she told Daily Mail Australia. 'It feels like any kind of profit businesses make is going towards keeping the company going and investing back into the business rather than supporting employees with wage increases. 'They're the ones having to pay to get to the office and keep meals on the table and pay all their bills. It's just tough. 'Most people's wages haven't grown at the same rate the price of things have.' Ms Pike said the cost of living crisis was only likely to get worse for those with a job, either renting or paying off a mortgage. 'We know that prices just keep rising so it may just get tougher,' she said. 'We know that cost of living has been a big pain point for Australians over the last few years,' Ms Pike said. 'With things like rent and groceries going up, it's just harder, your money doesn't stretch as far.' Complicating matters are 'lifestyle expectations' seen on Instagram, TikTok, and Facebook. 'Social media tends to show you a certain life that you should be living, making you feel left out if you don't have that thing, and constantly throwing ads at you,' Ms Pike said. 'There's just so much more going on in the world now in terms of going out and going on holidays.' But in good news for young Aussies struggling with a mortgage, the Commonwealth Bank sees the RBA cash rate falling to 3.35 per cent for the first time since March 2023. CBA's head of Australian economics Gareth Aird said softer consumer spending was likely to weaken economic growth - as measured in gross domestic product. 'The recent softness in spending data coupled with downside risks to the global economy have resulted in us making a small downward revision to our GDP profile in 2025,' he said. Even with rate cuts on the horizon, saving was still a challenge during a cost-of-living crisis. 'We know that cost of living has been a big pain point for Australians over the last few years,' Ms Pike said. 'With things like rent and groceries going up, it's just harder, your money doesn't stretch as far.' New data reveals that fruit and vegetable prices have risen by 7.6 per cent over the past year. On the flip side, petrol prices have fallen by 7.6 per cent during the past year, which has seen motorists in capital cities typically pay less than $1.85 a litre for unleaded fuel. Electricity bills have also fallen by 9.6 per cent during the past year thanks to $75 quarterly rebates from the federal government which are being extended until the end of 2025.
Daily Mail
09-05-2025
- Business
- Daily Mail
How much should I have in savings?
Australia's cost-of-living crisis has highlighted how hard it is to save up. While inflation is moderating, the rising cost of goods and services after Covid lockdowns depleted savings. Someone who lost their job or suffered a major illness would have less available in an emergency fund to draw upon. That meant the need to have money in the bank for those financial emergencies with renters and home borrowers both being squeezed. Then there is the need for savings to meet financial goals like saving up for a mortgage deposit or an overseas holiday. While the average Australian has tens of thousands of dollars in savings, four in 10 people have less than $1,000 in the bank. Finder 's money expert Rebecca Pike said saving up was particularly hard for young people. 'The Gen Zs, even younger millennials, are kind of really just starting out and they're starting out at a hard time as well,' she told Daily Mail Australia. What is the average level of savings by age group? Australians have an average of $41,023 in the bank, a Finder survey of 1,013 Australians taken in early 2025 found. But Generation Z consumers, born since 1997, had the lowest savings level of $20,766 with Australia's youngest adults more likely to be battling soaring rents. 'They will have the challenge of probably earning less but they also haven't had the time to build up their savings so any extra costs they're having to face at the moment, they just won't have the back-up to lean on,' Ms Pike said. 'They're not having that financial buffer behind them.' Generation X Australians, born from 1965 to 1980, had the highest savings level of $49,777 despite being the demographic more likely to be paying off a mortgage. The oldest member of this group are turning 60 this year, which means they can access their superannuation to retire. Millennials, born from 1981 to 1996, had $44,276 in average savings as the group most likely to be paying a greater proportion of their income on mortgage repayments. Baby boomers, born from 1946 to 1964, had the highest average savings pool of $49,669 as the only generation where everyone is able to access their superannuation. 'The older generations have had time to build up their savings, they've got more equity in their home,' she said. 'Many of them may have paid off their home loan and if they are investing, they've been able to see gains from that over time.' Those born in 1968, who are turning 67 this year, are also able to access the age pension, which can be combined with superannuation. While older Australians are more likely to have savings, a staggering 38 per cent of people have less than $1,000 in the bank, with renters more likely to be in this situation. 'Two in five Australians have less than a thousand dollars which means that there is a huge cohort, they're probably living pay cheque to pay cheque,' she said. 'They're probably scrimping and saving what they can. 'Of the people that have less than $1,000 in savings, the average is like $120 so they're having to be really specific about what they can afford each week, each month. 'For those people, having a savings goal isn't necessarily an easy thing - they just don't have the money spare to save so it would be really tough for those people.' How much do you need to for an emergency? The Commonwealth Bank, Australia's biggest home lender, recommends having enough savings in an emergency fund to cover three to six months' worth of expenses in the event of a job loss. This is especially the case if someone has children. Ms Pike said an emergency saving pool would typically consist of several months of pay before tax. 'You want three to six months of your salary saved up so that if you were to lose your job, if you were to get physically unable to work, you would be able to get by for a few months,' she said. Term deposit accounts pay higher levels of interest, often at 4.7 per cent, but charge fees if someone withdraws before the maturity date. The major banks offer the option of having money from the everyday transaction account diverted to a term deposit account after pay day, which takes away the temptation to overspend on luxuries like restaurant meals. 'Sometimes, it's removing that temptation or removing the ability to be able to do it, will help,' she said. 'If you know it's going to keep you away from that money, then it might be a good solution for you but you need to know that you won't need it in that time you shut it away. 'You've got to make sure that you're not going to desperately need that money and an emergency bill isn't going to come in that you can't afford to pay because your money's locked away.' Having a savings goal Saving up for a mortgage deposit or a big purchase like a new car or an overseas holiday requires discipline. Ms Pike said saving for a particular goal would require setting aside 50 per cent of pay for housing costs, electricity and water bills and grocery costs; plus 30 per cent for wants and the remaining 20 per cent for an emergency or savings goal. But if someone wanted to save up for a mortgage deposit or an overseas holiday, they would have to set aside 50 per cent of their pay for living costs and just 20 per cent for luxuries, with the remaining 30 per cent going towards saving for a big purchase or a rainy day. 'If you have a couple of different savings goals - say you are saving to buy a house - you should also separately have a saving goal of keeping that emergency buffer,' she said. Australia's median house and unit price was $825,349 in April, CoreLogic data showed. From January 2026, all first-home buyers would be able to get in with a 5 per cent deposit and not have to pay lenders mortgage insurance. So, 5 per cent of $825,349 is $41,267. For those who have already owned a home, they would need a 20 per cent deposit of $165,070 to get a mortgage without having to pay lenders mortgage insurance.
