What the Cost of Living May Look Like in 2025
Predictions for 2025 suggest potential relief for Australians facing rising living costs
Australia, Cost of Living, Interest Rates, Support Payments, Housing
Australia: It looks like Aussies might catch a break from the rising cost of living in 2025. Canstar has some predictions that could bring a bit of relief.
They’re talking about possible rate cuts and inflation changes that could help lighten the load for many. Major banks like CBA, Westpac, NAB, and ANZ are expected to lower cash rates between February and May.
CBA might lead the pack with four cuts, which could mean a drop of about $358 in monthly repayments for a $600,000 loan by the end of 2025. That’s a nice chunk of change!
Westpac is also in the mix, with similar cuts expected. But here’s the kicker: Canstar’s Sally Tindall warns folks with mortgages not to just sit back and hope for the best. There’s no guarantee the RBA will cut rates next year.
She suggests taking action now—like negotiating your interest rate or refinancing. That way, when those cuts do happen, you’ll be in a better spot.
On top of that, support payments like Youth Allowance and Austudy are set to get a boost of $30.60 every fortnight. While it might not solve all budget issues, it’ll help with everyday expenses.
There’s also the government’s Help to Buy program, which could help lower-income first-home buyers get into the market. This program allows up to 40,000 buyers to purchase homes with a smaller deposit and lower repayments.
Labor passed this bill recently, and while states need to get on board, it’s a step in the right direction. Buyers need to earn under $90,000 individually or $120,000 as a couple to qualify.
Each state will have its own price caps, ranging from $450,000 to $950,000 for homes in Sydney and nearby areas. It’s not going to fix skyrocketing property prices, but it gives more people a chance to own a piece of their home.
Sally’s final tip? Take some time in the new year to set up a budget and financial goals. Having a plan will help you figure out what you want to achieve in 2025 and how to get there.