Finance Update: March 2025

In this Finance Update: March 25, we take a closer look at key trends shaping the property and lending landscape. With the Reserve Bank of Australia’s next cash rate decision set for May 21st—and the possibility of a rate cut on the table—here’s what else is making headlines:

  • Rate gap highlights need for regular loan reviews
  • Building approvals hit 2-year high
  • Banks offering LMI waivers
  • How housing has changed since COVID

Study Highlights Significant Gap in Variable Home Loan Rates

The gap between the average variable interest rate and the lowest variable rate on Finder, a comparison website, was 1.57 percentage points in early March, while the gap between the average and the lowest fixed rate was 1.37 percentage points.

It is very important to note that interest rate comparisons are not always equal, and some loans may be more suitable for certain borrowers depending on their eligibility criteria and extra loan features, such as an offset account or redraw facility.

Nevertheless, the data does highlight the importance of reviewing your home loan every two or three years, because lenders that may have offered very competitive interest rates in the past may have since fallen behind other lenders.

To show you the considerable savings that may be available through refinancing, let’s consider some basic calculations: if a borrower had 25 years left on their mortgage and switched from a loan with a 6.50% p.a. interest rate to one with a 6.00% p.a. rate, here’s how much they could potentially save over the life of the loan:

  • $46,359* if they had $500,000 left on their mortgage
  • $69,538* if they had $750,000 left on their mortgage
  • $92,717* if they had $1,000,000 left on their mortgage

I can research the market for you to see if there are more competitive loans available and can also discuss other potential options that might save you money.
* The figures provided are for illustrative purposes only and are based on a hypothetical scenario. They assume the borrower has an owner-occupier home loan with principal-and-interest repayments and 25 years remaining on the loan term. They also assume no changes to the loan term, all monthly repayments are made on time, and no additional fees, charges or changes to repayment frequency apply. Actual savings will vary depending on your individual circumstances, loan terms, interest rate, fees and lender policies. This is not financial advice and should not be relied upon as such. Please speak to a licensed mortgage broker to understand whether refinancing is suitable for your situation.

Two-Year Record Set for Building Approvals

Homebuilding approvals are heading in the right direction, opening up the possibility of more residential construction activity in the near future.

A total of 16,579 approvals were issued in January, according to the Australian Bureau of Statistics. This marked a 6.3% month-on-month increase and a 21.7% year-on-year increase, and was also the highest monthly total since December 2022.

“These increases in approvals signal positive momentum heading into the new year, with households slowly returning to the market and building new homes,” Housing Industry Association economist Maurice Tapang said.

“New housing approvals had been strengthening on the back of low levels of unemployment, recovering real wages and ongoing strong population growth, even before the first interest rate cut was delivered [in February].”

Master Builders Australia chief economist Shane Garrett also welcomed the increase in approvals numbers, but warned that without a further rise, housing supply would continue to fall short of demand.

“Higher-density home building has been at woeful levels for nearly a decade with insufficient new supply in this part of the market forcing rental prices sky high,” he said.

Special Loan Offers Available for Eligible Professionals

Good news if you’re an essential worker – some lenders offer LMI waivers to professions such as police officers, teachers, firefighters, nurses, midwives and paramedics.

Lender’s mortgage insurance, or LMI, is an insurance premium you generally get charged when you provide a deposit of less than 20%. For example, if you were a first home buyer and wanted to buy a $600,000 property with a 10% deposit, you would generally have to pay an LMI premium of about $13,000.

However, depending on your profession and choice of lender, you may be able to take out a low-deposit home loan without needing to pay LMI.

This LMI waiver is not something that all lenders offer to all essential workers; rather, it’s something that some lenders offer to some essential workers.

As your broker, I know the credit policies of a range of lenders, so if you’re an essential worker, get in touch to discuss your options. Depending on your circumstances, I might be able to find you a better home loan deal than you realised was possible.

Looking Back: How the Market Has Transformed Over the Past 5 Years

Five years on from the start of the COVID-19 pandemic, the property market is in a very different place.

When the pandemic started, some banks predicted a crash in property prices. Instead, the national median price fell just 1.7%, before rebounding. By March 2025, the national median was 38.4% higher than in March 2020, according to CoreLogic. That included an increase of 56.3% in the combined regions and 33.6% in the combined capitals.

Meanwhile, the median rent in March 2025 was 37.6% higher than five years earlier. House rents (38.7%) and unit rents (35.1%) recorded similar growth in that period, even though, in the early days of the pandemic, unit rents fell sharply due to the big drop in demand from international students.

The interest rate picture has also changed significantly over the past five years. The cash rate was just 0.75% before the pandemic; the Reserve Bank of Australia (RBA) then reduced it not once but twice in March 2020 to 0.25%, before reducing it again in November 2020 to a record-low 0.10%. In 2022, the RBA started reversing course; as of March 2025, the cash rate was 4.10%.

While the economy and property market regularly experience ups and downs, I’m always here to help. Please get in touch if you want to buy a property, build a home or refinance a loan.

Finance Update July 2023

As we reach the end of July, it’s time to reflect on the biggest news of the month. Here are four finance, property and tax stories that really stood out:

  • RBA reforms cash rate
  • HomeBuilder extension
  • Property listings rise
  • How to get tax help

The Reserve Bank of Australia (RBA) has unveiled a series of reforms, in response to an independent review commissioned by the federal government.

Starting in 2024, the RBA board will meet eight times per year to assess the cash rate, rather than the current 11. Meetings will last longer; and, before each meeting, board members will have the opportunity to speak with a broader range of RBA staff.

“The less frequent and longer meetings will provide more time for the board to examine issues in detail and to have deeper discussions on monetary policy strategy, alternative policy options and risks, as well as on communication,” RBA governor Philip Lowe said.

“Likewise, the staff will have more time for analysis, with less time spent preparing summaries of recent developments.”

In another change, the governor will hold a media conference after each cash rate meeting, which “will provide a timely opportunity to explain the board’s decisions and to answer questions”.

Meanwhile, the federal government has decided not to grant Governor Lowe a second seven-year term. As a result, the current deputy, Michele Bullock, will assume the top job in September when Governor Lowe’s term expires.

The deadline for existing HomeBuilder applicants to submit supporting documentation has been officially extended to 30 June 2025.

The deadline was previously set at 30 April 2023, but, in March, the federal government proposed to extend it, subject to the agreement of states and territories – which has now been secured.

This extension applies only to people who had already received formal approval under the HomeBuilder scheme for off-the-plan purchases or renovations. Applicants do not need to do anything to access the extension – it will automatically apply.

The reason the government extended the deadline was to support people who had entered into financial commitments on the basis they’d received the grant, but, through no fault of their own, were unable to use it due to supply constraints and construction industry delays.

Applications for HomeBuilder closed in April 2021. States and territories administer the scheme on behalf of the federal government.

 
In good news for buyers, there’s been an increase in the number of properties listed for sale, as well as an increase in the total number of properties on the market.

SQM Research has reported that the number of new listings (i.e. those less than 30 days’ old) in June was 1.6% higher than the month before.

At the same time, the number of for-sale properties – which includes both new listings and older ones – was 1.8% higher than the month before.

So more homeowners are listing their property for sale and those homes are taking longer to sell.

 

With more properties on the market, buyers have more choice, which means they don’t have to compete as hard on price. In the month to 4 July, there was a 2.0% reduction in prices being asked by vendors.

Given that market conditions are favouring buyers in many parts of the country, this might be a good time to buy. Contact me if you’d like me to find you a great home loan.

If you’re feeling confused about preparing your tax return, the Australian Taxation Office (ATO) has advised you to seek help from its digital self-help tools.

 

“We get lots of calls from the community about topics that can be easily resolved through our digital self-help tools, so it may be better to not wait in a queue to speak to someone when you can do it yourself, at a time and place that suits you,” ATO chief service delivery officer David Allen said.

“Our website has a wealth of information that you can refer to, including specific pages that explain what’s new this tax time for individuals and tax professionals. There is even a virtual assistant called ‘Alex’ that can help you track down the information you need.”

The ATO also provides digital tools, including myTax and the ATO app, which you can use to answer questions and perform specific actions on accounts. You can also seek help from the ATO Community, an online, peer-to-peer platform.

Online tax returns will take up to 14 days to process, according to the ATO.

Finance Update June 2023

There’s been an enormous amount of finance, property and tax news since my last newsletter. Here are four of the biggest stories right now:

  • Fixed-rate cliff explained
  • ATO warns property investors
  • Regulation coming to BNPL
  • Tax scam warning

 

Australia’s mortgage market is experiencing a significant shift, with many homeowners coming off two-year and three-year fixed-rate loans onto much higher variable rates today.
 

Starting during the 2020 pandemic, there was a boom in fixed-rate borrowing, as lenders slashed their fixed rates to record-low levels and many borrowers took advantage. At the peak, almost 40% of outstanding home loans in early 2022 were fixed, which was “roughly twice their usual share from prior to 2020,” according to a research paper published by the Reserve Bank of Australia (RBA).

 
As of March 2023, about 25% of fixed-rate loans outstanding in early 2022 had expired. By the end of 2023, another 40% will expire; and by the end of 2024, another 20%. This is what the media has been referring to as the ‘fixed-rate cliff’.
 
Here are three tips if you’re about to revert from a fixed to a variable loan:
 
  • Start budgeting right now for higher interest rates
  • Contact me to discuss whether you could refinance to a new lender with a more suitable fixed or variable rate
  • Limit your spending to increase your chances of qualifying for a new loan
 
 
The Australian Taxation Office (ATO) has revealed it will have three key focus areas this tax time – one of which will be deductions claimed by property investors.

 

The reason property investors are being targeted is because an ATO review found nine in ten property investors were filing faulty tax returns. Common errors included:

  • Leaving out rental income
  • Making mistakes with property-related deductions – like overclaiming expenses or claiming for improvements to private properties

As a result, the ATO said it would match investor tax returns with data from home loan providers and insurance providers, to ensure investors don’t omit income or inflate deductions.

“Around 80% of taxpayers with rental income claimed a deduction for interest on their loan, and this is where we’re seeing mistakes,” ATO assistant commissioner Tim Loh said.

“For example, you can’t refinance an investment property to buy personal items, like a holiday to Europe or a Tesla, then continue to claim the interest expenses as a tax deduction.”

The ATO’s other two focus areas will be work-related expenses and capital gains tax.

 

 
The federal government will change the law so buy-now-pay-later (BNPL) products are regulated as credit products, like home loans.
 
The reason BNPL services are regulated differently is because, technically, they’re not a form of credit, as consumers are not charged interest.
 
However, as Minister for Financial Services Stephen Jones told the Responsible Lending & Borrowing Summit: “BNPL looks like credit, it acts like credit, it carries the risks of credit.”
 
“We have heard that some people are opening multiple BNPL accounts, to access far more debt than they’d be able to get on a credit card or a payday loan,” he said.
 
However, Minister Jones also said BNPL had done a lot of good for the economy, and provided a lot of benefit to both consumers and businesses.
 
As a result, he said the government’s legislation would be “a proportionate solution” that would allow consumers to continue enjoying BNPL while establishing “appropriate safeguards”.
 
The government plans to release exposure draft legislation later this year and introduce the final bill to parliament by the end of the year.

 
Consumers have been warned to expect heightened scam activity and new tax scams now that tax season is almost upon us.
 
The Australian Taxation Office (ATO) received about 20,000 scam reports in the first 11 months of the 2022-23 financial year, according to Minister for Financial Services Stephen Jones.
 
Minister Jones said impersonation scams – in which criminals pretend to be from the ATO – were common at this time of year.
 
Under these scams, fraudsters will contact people by unsolicited phone calls, emails, text messages and social media messages. They may offer to answer tax questions, promise fake tax refunds or direct users to fake myGov login pages. Often, their aim is to collect as much personal information as possible.
 
The ATO will never send you a link to login to their online services or ask you to send personal information via text, email or social media.
 
Do not respond if you receive any suspicious contact. Instead, call 1800 008 540 to check if it was the ATO speaking with you.

Finance Update May 2023

These are interesting times, with interest rates appearing to be close to their peak and housing prices rising again. Here’s what’s making news in finance and property:

  • Property prices rising
  • RBA to be reformed
  • First home buyer update
  • Unit rents surging

Australian property prices look to be trending upwards again, judging by the latest data from CoreLogic.
 
After the national median price fell 9.1% between May 2022 and February 2023, it has since risen in consecutive months – by 0.6% in March and 0.5% in April.
 
“Not only are we seeing housing values stabilising or rising across most areas of the country, a number of other indicators are confirming the positive shift,” CoreLogic’s research director, Tim Lawless, said.
 
 
“Auction clearance rates are holding slightly above the long run average, sentiment has lifted and home sales are trending around the previous five-year average,” he said.
 
Mr Lawless said it was notable this housing turnaround was occurring despite interest rates remaining elevated.
 
“The last time we saw housing values trending higher through a rising interest rate environment was during the mid-to-late 2000s when the mining boom was underway. This period was also characterised by surging net overseas migration that contributed significantly to housing demand,” he said.
 
 
The Reserve Bank of Australia (RBA) is set for a shake-up, following a review commissioned by the federal government.
 
The review made 51 recommendations, including specific measures to create a clearer monetary policy framework and stronger monetary policy decision-making.
 
Treasurer Jim Chalmers said the government agreed in-principle with all the recommendations and would work with the RBA and parliament to implement them.
 
Subject to consultations with the opposition, the Treasurer said the government would introduce legislation to:
 
  • Reinforce the independence of the RBA in the operation of monetary policy
  • Split the RBA board into two – with one board to oversee monetary policy and the over governance
  • Strengthen the RBA’s mandate
  • Clarify that Australia’s monetary policy framework will aim for both price stability and full employment
Treasurer Chalmers also said the government would institute a more transparent process for appointing external members to the RBA boards.
 
 
It’s too early to say first home buyers are back, but they’ve certainly made a welcome return to the market, according to the latest data from the Australian Bureau of Statistics.

The number of new owner-occupier first home buyer loan commitments rose 15.8% in March, after reaching a five-year low in February.

That said, first home buyer activity was 21.8% lower than the year before and 50.5% lower than the January 2021 high.

Now that property prices appear to be rising again (see first story in newsletter), it might be wise for first home buyers to enter the market sooner rather than later, before prices rise further. Saving a deposit can be hard, but there are two ways to speed up the process.
Under the First Home Guarantee, the federal government helps eligible first home buyers purchase a property with just a 5% deposit without having to pay lender’s mortgage insurance. Income and price caps apply.

First home buyers who have parental support can use a guarantor home loan to enter the market with, potentially, a 0% deposit. Again, conditions apply.

I love helping first home buyers get on the property ladder. Contact me for expert advice.

Things are looking up for owners of units, whether owner-occupiers or investors.

After the national median unit price fell for 10 consecutive months, it increased in both March (0.6%) and April (0.7%), according to CoreLogic.

CoreLogic economist Kaytlin Ezzy said this could signify “the start of a slow recovery phase, with inflation seemingly moving past its peak and consumer sentiment rising from near-record lows”.

Meanwhile, unit rents are not only surging (up 14.8% over the year to April), they’re growing significantly faster than house rents (8.4%).

“The mismatch between [unit] rental supply and demand has seen capital city rental growth reaccelerate, which will be unwelcome news to many tenants already struggling to find affordable rental accommodation,” Ms Ezzy said.

“While units across each of the capitals and rest-of-state regions still offer a more affordable rental alternative compared to houses, the stronger rental growth seen in the medium to high-density sector, in part due to their relative affordability, has seen the gap narrow.”