Amid a period of robust consumer spending, Australia's mortgage holders may face limited future interest-rate cuts.
The Commonwealth Bank has observed Australians increasing their spending over the last six months, spurred by rising incomes, a robust job market, and previously lowered interest rates.
According to Belinda Allen, CommBank's Head of Australian Economics, the economy's continued resilience and rebounding consumer confidence reduce the necessity for additional rate cuts by the Reserve Bank of Australia (RBA). The bank anticipates one more rate reduction in November, but no changes are expected in the RBA's September meeting, suggesting a potential drop in the official cash rate from 3.60% to 3.35%.
The bank's data highlights a 0.3% rise in consumer spending for August, following increases in preceding months. The Household Spending Intentions index shows increased expenditure across nine of twelve categories, notably in utilities, communication, recreation, and education, while spending on insurance, household goods, and food diminished.
Key drivers of this spending surge include the adoption of online services, particularly gaming and streaming, alongside weather-related spending patterns. Sydney experienced its wettest August in 27 years, prompting more spending on food delivery over dining out.
This trend aligns with Australian Bureau of Statistics data, indicating a stronger-than-expected GDP in the June quarter, spurred by consumer activity. RBA Governor Michele Bullock has expressed concern that sustained consumer spending could stifle interest-rate reductions, emphasizing the growing consumer prudence and its unforeseen robustness.
Echoing this sentiment, ANZ's Head of Australian Economics, Adam Boyton, cautions that should consumer spending persist without weakening CPI or labour market indicators, the RBA might maintain the current cash rate, viewing it as "broadly neutral."
With each of the four major banks predicting a pause in rate changes following the RBA's end-of-September meeting, a November cut is still anticipated. Additionally, NAB and Westpac foresee further reductions in early 2026.
Australia’s leading financial institution, the Commonwealth Bank of Australia, has openly criticised the Reserve Bank of Australia (RBA) for its calculations related to a proposed reduction in debit and credit card transaction fees. The RBA suggested that the reform would save Australian businesses $1.2 billion annually and benefit the majority of companies, a claim that the Commonwealth Bank strongly disputes. - read more
Amid a period of robust consumer spending, Australia's mortgage holders may face limited future interest-rate cuts. The Commonwealth Bank has observed Australians increasing their spending over the last six months, spurred by rising incomes, a robust job market, and previously lowered interest rates. - read more
The Compensation Scheme of Last Resort (CSLR) recently highlighted potential delays in compensation payments due to insufficient special levy funds. In July, the CSLR's proposed FY2025–26 levy plan allocated $67.29 million for financial advisers, surpassing the $20 million limit set for the subsector. This shortfall of $47.29 million prompted the Treasury to initiate a consultation in August to determine funding solutions for the excess levy. - read more
There's nothing quite like the thrill of buying your dream motorcycle. The freedom of the open road, the wind in your hair, and the sense of adventure are all within your reach. But before you can ride off into the sunset, you'll likely need some financial assistance to make that dream bike a reality. - read more
When it comes to buying a motorcycle, having a solid credit history can make a significant difference in your loan approval process. Whether you're a first-time buyer or looking to upgrade, a good credit history showcases your financial responsibility and reliability to lenders. - read more
Motorcycle financing options in Australia can be complex and varied. Whether you are a seasoned rider looking to upgrade your bike or a beginner planning to purchase your first motorcycle, understanding the different financing options available to you can save you time and money. In this blog article, we will delve into the various motorcycle financing options in Australia, providing you with the information you need to make an informed decision. - read more
START HERE
Get a free bike loan eligibility assessment and compare offers tailored
specifically to your circumstances.
Knowledgebase
Loan-to-Value Ratio (LTV): A ratio that compares the value of the loan to the market value of the property securing the loan.
