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
3 min
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 13th 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.
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Crafted by Pandolfini Architects with interiors by Lisa Buxton, the Glen Iris residence pairs industrial-inspired design with refined contemporary living and a five-car showroom pavilion.
2 min
A bold architectural statement in Melbourne’s inner east, this unique Glen Iris home marries sculptural design with sophisticated family living in a remarkable real estate relationship.
Conceived by Pandolfini Architects, with interiors by Lisa Buxton, the custom-built four-bedroom, two-level home was crafted for its current owners but is now coming to market for the first time.
Listed via an expressions-of-interest campaign with Marshall White agents Rae and Hugh Tomlinson and Mandy Zhu, 8 Erica Ave is on the market with price expectations of $7.5 million to $8 million.
Its dramatic street appeal sets the tone for what’s to come, because beyond the contemporary façade sits a modern residence unlike any other.
Pandolfini’s team brief was to create an inviting home made from hard-wearing materials, with a palette inspired by ancient ruins and old industrial buildings.
The result is striking, cantilevered terracotta brickwork and a patinated copper-screened exterior that borrows hues from the classic neighbouring cottages.
One within the home, the Erica Ave property unfolds across three interconnected pavilions positioned along the deep block. Long gallery hallways are framed by floor-to-ceiling glass to showcase garden and pool views, making the most of the 886 sq m site.
Raw, heavily textured walls create an industrial aesthetic inside and out, while curious “upside-down” arched windows introduce a creative architectural twist.
At the heart of the home, the central living and dining zone is divided by a sculptural fireplace rendered in hard plaster. High barn-style spotted gum timber ceilings rise above bush-hammered concrete walls with Roman travertine floors, and American oak joinery.
In the marble kitchen, there are premium Wolf and Miele appliances, a butler’s pantry, an integrated study nook, and a bespoke curved window that wraps around a custom-made banquette dining space.
Walls of glass frame the north-facing terrace where a heated swimming pool and spa are enveloped by private landscaped gardens with an integrated barbecue setting.
Within the front pavilion, the large parents’ retreat features built-in and walk-in wardrobes, a dresser, and a travertine ensuite with a freestanding bathtub, rain shower, and a dual-marble vanity. Also on the ground floor is a second bedroom and a media room with a built-in daybed and a picture window overlooking the yard.
One floor up via the curved staircase with skylight, there are two more bedrooms with terrazzo bathrooms, study spaces, and leafy outlooks.
Car enthusiasts not only have a single lock-up garage on Erica Ave, but an additional rear showroom-style five-car pavilion or grand studio accessed via Irymple Ave. It has a high vaulted ceiling, a concealed in-floor Maha car lift, a workbench, and a sink.
Added extras include a mud room, laundry with side access, in-floor heating and climate control within the engineered European oak floors, deluxe joinery, and CCTV security.
The Glen Iris home is within walking distance of Central Park Village, Harold Holt Swim Centre, and Gardiner Station, as well as popular schools including Sacré Cœur, Korowa, and Caulfield Grammar.
The Pandolfini-designed house at 8 Erica Ave, Glen Iris is listed with Marshall White for $7.5 million to $8 million via an expressions of interest campaign.
Wealthy Aussies are swapping large family homes for high-end apartments, with sales of prestige units tripling over the past decade.
Automobili Lamborghini and Babolat have expanded their collaboration with five new colourways for the ultra-exclusive BL.001 racket, limited to just 50 pieces worldwide.
