Aussies to spend almost $1.7 billion this Easter


Two-thirds of landlords could do better investing in super, Easter eggcitement fuels $1.7 billion spending spree, and 40% of first homebuyers rely on family help.  Here are five things you may have missed this week.

Rental market "broken" - and not just for tenants

A new report from property settlement platform PEXA describes Australia's rental market as "broken".

aussies to spend big on easter

From landlords to renters, PEXA says the Australian property system is not working for anyone.

Renters face fierce competition for leases and poor tenure security.

Meanwhile, property management headaches and unexpected maintenance costs see up to two-thirds of landlords earn poorer financial returns than if they had invested in super instead of bricks and mortar.

The study adds that property investment can be far more time-consuming than many people expect, which partly explains why half of all investment properties exit the rental market within five years.

Sweet spending boon predicted for Easter

Easter is just a fortnight away, and despite cost-of-living pressures, the long weekend is shaping up to be a sweet treat for retailers.

A survey by the Australian Retailers Association (ARA) found Australians are tipped to spend almost $1.7 billion on hot cross buns, easter eggs and other Easter-centric food - $200 million more than we spent last year.

The average spend works out to more than $100 per person, but ARA CEO Paul Zahra says Easter remains a sweet spot in a challenging year.

"Australians are under severe pressure right now due to the rising cost of living and interest rate hikes, but for many, Easter is time to relax and enjoy special time with family and friends," Zahra notes.

If you're in the market for hot cross buns, consumer group Choice rated Woolworths' traditional buns as the best of the bunch, with a cost of 67 cents per bun.

If chocolate buns are more your style, Aldi topped the list, with an average price of 58 cents per bun.

40% of first homebuyers rely on family help

A study by the Australian Housing and Urban Research Institute (AHURI) shows many first homebuyers could afford ongoing mortgage repayments, but saving a deposit is a key hurdle to getting into the market.

AHURI's survey of 25-34-year-olds in Sydney and Perth, found over 70% of respondents worked multiple jobs over the last five years.

But this still isn't enough to buy a home.

The real clincher is access to family support, with around 40% of first homebuyers expecting to rely on family assistance to purchase a first home.

The study noted that in Sydney, family support was "an essential component of being able to buy a home in all cases".

Accountants, real estate agents with SMSFs on notice

Australians with a self-managed super fund (SMSF) could be at risk of copping a 45% penalty tax rate to their super simply by applying their professional or trade skills to their personal super.

The trap arises because of complex restrictions on non-arm's length transactions, and accounting body CPA Australia says tradies and professional services workers are most at risk.

As a guide, an accountant can be penalised for completing their own SMSF's tax return unless they charge the fund for the work.

A real estate agent who sells an investment property held by their SMSF can land themselves in hot water if they don't charge the fund a commission.

The same may apply to a tradie who does a bit of DIY maintenance on a property owned by their SMSF, without billing the fund for their work.

The penalty tax rate of getting it wrong can be 45% or more, and is applied to every contribution made to the super fund, including compulsory payments from employers.

According to CPA Australia, an Australian with a $135,000 superannuation balance and an annual income of $90,000 could be slugged $6,000 in penalty taxes if they accidentally fall on the wrong side of these rules.

A coalition of accounting bodies is lobbying the federal government to have the rule changed.

One in four Aussies can't get by without a credit card

Credit card spending has reached record levels in Australia as disposable income dries up, according to research by Finder.

Monthly purchases on credit cards reached a record high $33.5 billion in January - a whopping 17% increase over the year.

Soaring cost of living pressures are a likely contributor, with a Finder survey showing one in four Australians say they can't manage their finances without a credit card.

Finder's Amy Bradney-George, says, "As prices continue to rise, consumers are depending on credit cards more - including to pay for essentials like food and utilities.

"There is a very real risk that relying on a credit card, or any form of credit, to cover these costs will lead to interest charges and further debt."

Mozo reports that several card issuers have recently scaled back introductory purchase rate and balance transfer offers.

While the average credit card rate is 17.5%, you could pay as little as 7.49% with a G&C Mutual Low Rate Visa card.

Get stories like this in our newsletters.

Related Stories

A former Chartered Accountant, Nicola Field has been a regular contributor to Money for 20 years, and writes on personal finance issues for some of Australia's largest financial institutions. She is the author of Investing in Your Child's Future and Baby or Bust, and has collaborated with Paul Clitheroe on a variety of projects including radio scripts, newspaper columns, and several books.