2025, A Pivotal Year for the Australian Financial Landscape

As we enter a new year, the Australian financial landscape continues to evolve, presenting both opportunities and challenges for home buyers and owners alike. With housing demand shifting, and lending policies adapting to economic conditions, 2025 is set to be a pivotal year.

Here are some insights for the year ahead:

1. Attractive Assets

Inflation remains above acceptable levels, and global stock markets, after a remarkable run, now appear fully valued. 

With rising geopolitical uncertainty, a shift toward tangible, quality assets is likely to emerge by mid-2025. 

This trend favours residential and commercial property as attractive asset classes, supported by an expected decline in interest rates.  

2. Interest Rate Drop

Financial markets estimate a 73% chance of a rate drop in February 2025. While most banks anticipate rate reductions by May 2025. 

A rate drop will likely reignite competition among banks, creating an opportunity to review and refinance your loans.

3. Cost of Living

Cost of living pressures continue to affect households significantly. The average mortgage repayment has risen to $3,833.11 per month, or $45,997.32 annually. 

With the average full-time Australian worker earning a gross income of $90,416, a larger share of household budgets is now dedicated to loan repayments.

4. Refinancing SMSF

Major banks are withdrawing from the self-managed superannuation fund (SMSF) loan market, leaving many customers with uncompetitive rates. As a result, there has been a notable increase in SMSF loan refinancing activity.

The information provided is general in nature and does not constitute personal financial product advice. It does not take into account your objectives, financial situation, or needs. Before acting on any information, you should consider its appropriateness in light of your own circumstances.