What Aussies Are Doing To Cope With The Cost-of-living Crisis

Mortgage holders are limiting household spending and refinancing their loans, while a rising number of young Australians are moving back home with their parents. These are some of the ways in which people are dealing with today’s cost-of-living crisis, which has been caused by the highest inflation rate in two decades along with rising interest rates and rents, according to research by Finder.

Three in four Australians surveyed in September said they were somewhat or extremely stressed about their financial situation. This includes 84% of mortgage holders, up from 76% in September 2021. Finder says almost $15,000 in extra interest costs have been added to the annual repayments of an average Australian home loan. And that was before the Reserve Bank of Australia raised the official cash rate again this week. The RBA raised rates by 25 basis points to 4.35%. That was the 13^th increase since May 2022 and takes the cash rate to its highest level since 2011.

The research cites data from the Australian Bureau of Statistics showing the total monthly value of refinanced home loans peaked at $22 billion in June. Finder says more than 70% of refinancing borrowers were going to a new lender rather than renegotiating with the existing one. However, the savings were fairly small. On average, refinancers went from a variable rate of 5.01% to 4.78%.

Graham Cooke, Finder’s Head of Consumer Research, said “the willingness of homeowners to refinance for even marginal gains underscores the pervasive cost-of-living crisis, reflecting a desperate search for any fiscal relief.” He added that millennial homeowners were struggling the most today. “This could be a sign that they jumped in when rates were at record lows and were unprepared for an environment where rates and repayments increased.”

Finder says young renters are increasingly moving back in with their parents to escape rising rents or to save to buy a home. Unaffordable rents prompted 30% to move back home. A further 30% did so to save money for a home deposit, while 14% said the loss of a job forced a change in living arrangements. Mr Cooke said interest rate rises were actually having a higher impact on renters, given landlords typically pass on higher costs to tenants through rent increases.

Cutting discretionary spending is another method of coping with rising costs. The Finder research shows 45% of Australians have cut back on dining out or ordering home delivery, 32% are shopping around for better prices, 23% have reduced beauty and self-care treatments, and 19% have cancelled a holiday. A small proportion (3%) have moved their child to a different school with lower fees.

Refinancing advice

Mr Cooke said it was important not to rush a refinancing decision. “There is a significant gap in rates offered by different lenders for comparable loan products. The best thing you can do is take the time to review and compare your home loan options to ensure you’re getting the most competitive rate. It’s never too late to find a better home loan deal.”

Advice if you’re moving back home

Mr Cooke said there was no point ‘returning to the nest’ without changing your spending habits. “Prioritising a budget is critical. Start cutting out non-essentials and look for ways you can save money. Working out all your expenses to the smallest detail will give you an idea of how much capacity you have to save.”

Tips for cutting spending

Finder says shopping around can help reduce non-discretionary spending as well. Finder recommends that consumers consider switching energy providers and insurers, and use a high-interest account for savings. RateCity recently reported that nine financial institutions on its panel are now offering savings account interest rates that are above inflation at 5.5% or more.

Take up a side hustle

Finder research also shows 35% of Australians are earning extra income through side hustle jobs like dog walking, mystery shopping, tutoring, freelancing and ride-share driving. Popular non-employed side hustles include recycling cans and bottles, making and selling goods, selling pre-owned goods and renting out a spare room or garage.

A newly completed waterfront residence in Rose Bay has emerged as the latest test of Sydney’s trophy-home market, with the property reportedly carrying expectations of $100 million.

Set on around 830 sqm at 2A Bayview Hill Road, the five-level home occupies a secluded position overlooking Sydney Harbour. Its 180-degree outlook moves from Rose Bay Beach across the city skyline and Harbour Bridge to the North Shore, with glass used extensively throughout the house to keep the view at the centre of the interiors.

The property has been listed following a four-year construction program undertaken for developer Stuart Rose and his wife, Irina. The couple has reportedly decided to relocate overseas, bringing the newly finished home to market with Michael Pallier of Sydney Sotheby’s International Realty and Brad Pillinger of Pillinger.

The site has a notable history. Easybeats lead guitarist and songwriter Harry Vanda and his wife, Robyn, bought the waterfront holding for $667,500 in 1983. They later built a substantial brick residence on the property and retained it for more than three decades.

The Vandas sold the site to the Roses for $15.5 million in February 2015. That transaction provides a striking starting point for the property’s transformation: the earlier house has since made way for an entirely new residence designed around its direct harbour position.

The main living floor is arranged as a sequence of open spaces framed by extensive glazing and marble. A broad balcony extends the entertaining area towards the water, while a sheltered internal courtyard with custom banquette seating offers a more protected outdoor setting.

The principal kitchen combines a large marble island with concealed appliances. A separate butler’s kitchen adds two Wolf ovens and an integrated Sub-Zero refrigerator and freezer, allowing large-scale entertaining to operate without overtaking the main room.

Accommodation includes four ensuite bedrooms, with the main suite opening to a balcony and incorporating a large dressing room. An office and upper lounge can be adapted as a further bedroom suite, while the top level has the flexibility to function as a self-contained apartment with its own kitchenette.

The scale of the entertainment spaces becomes clearer on the lower levels. A dedicated wine lounge incorporates a temperature-controlled cellar, fireplace and bar. Elsewhere, a cinema with custom seating sits alongside music, library and games areas, supported by a third full kitchen.

The wellness component is described as a fitness centre rather than simply a gym. It includes a spa zone and waterfront lounge, with marble foundations already prepared should a future owner wish to add a steam room and sauna.

Outside, a mosaic-tiled heated infinity pool and spa are positioned above a level lawn and sun deck. A covered terrace contains a built-in gaucho grill, while the harbourside loggia and boathouse sit at the water’s edge with an outdoor shower and steps descending directly into the harbour.

A lift connects all five levels. Other inclusions extend to hydronic heating beneath marble floors, ducted air-conditioning, integrated sound, Control4 automation, CCTV, irrigation, solar panels and battery backup. A long gated driveway leads to garaging for three cars, including a stacker, with a forecourt and turning circle.

The reported $100 million expectation places the campaign, being run by conjunctional agents Michael Pallier from Sydney Sotheby’s and Brad Pillinger from Pillinger, within rare company. Only a small number of Sydney houses have crossed that threshold, including the Point Piper estates Fairwater, Elaine and UIG Lodge. A few doors down is the Bayview Hill Road home that sold for just over $83 million earlier this year to billionaires Alex and Vanessa Birkenstock, of the German leather sandal-family.

The listing arrives ahead of the Spring rush for trophy homes in Sydney’s premium harbourside pockets. Kanebridge recently featured Radford, the historic Wolseley Road waterfront home listed with an $85 million guide, followed by Deauville at 16 Longworth Avenue, which is seeking between $85 million and $90 million.

Property summary

– Address: 2A Bayview Hill Road, Rose Bay, NSW
– Price expectation: Reportedly $100 million
– Land: Approximately 830sqm
– Residence: Newly completed, five-level absolute-waterfront home
– Accommodation: Four ensuite bedrooms plus flexible fifth-bedroom or self-contained upper-level accommodation
– Key interiors: Main marble kitchen, butler’s kitchen, third kitchen, cinema, wine lounge and temperature-controlled cellar
– Wellness: Gym and spa zone, with provision for a steam room and sauna
– Waterfront: Heated infinity pool and spa, level lawn, harbourside loggia, boathouse and direct harbour access
– Parking: Triple garage including stacker, plus forecourt and turning circle
– Technology: Control4 automation, CCTV, integrated sound, solar panels and battery backup
– Previous sale: $15.5 million in February 2015
– Selling agents: Michael Pallier, Sydney Sotheby’s International Realty; Brad Pillinger, Pillinger

What Aussies Are Doing To Cope With The Cost-of-living Crisis

Limiting spending, refinancing loans, moving back home with mum and dad and working a side hustle are popular options being adopted today

Refinancing advice

Advice if you’re moving back home

Tips for cutting spending

Take up a side hustle