Bank lifts rates ahead of RBA meeting next week


Will the RBA keep rates on hold?

Mortgagees wait with bated breath on Reserve Bank decision, Reddit's going public, and more people are paying cash for real estate. Here are five things you may have missed this week.

Bank lifts rates ahead of RBA meeting next week

rba to meet next week

The Reserve Bank of Australia board is expected to keep the cash rate on hold at a 12-year high of 4.35% when it meets on March 18 and 19, but some banks are lifting interest rates for borrowers anyway.

Ubank, for example, has raised rates on variable mortgages for owner-occupiers and investors by between 0.05 and 0.1%.

Ubank is part of the National Australia Bank. Meanwhile, former RBA governor Philip Lowe is warning that interest rates are likely to stay higher for longer to keep inflation in check.

Reddit's $750 million IPO

Reddit expects a share price of US$31-$34 when it goes public later this month and is seeking a $6.4 billion valuation - despite reporting a net loss of US$90.8 million in 2023.

Reddit is a social media platform and online community that allows users to engage in discussions, share content and vote on posts and content.

Around 73 million users actively use the site daily, up from the 52 million daily active users in 2021.

The most loyal Redditors were given the chance to pre-register to buy shares by March 5.

Reddit hopes the IPO will raise as much as $748 million, some of which will be used to invest in new lines of business such as licensing data to AI firms to boost its bottom line.

A quarter of homes bought with cash

Paying cash for a home instead of taking out a mortgage is on the rise, with PEXA's 2023 Cash Purchases Report revealing that 28.5% of all residential property sales were paid for in cash last year.

The number of properties bought without a home loan is up more than 3% on 2022 figures, largely fueled by downsizers making a tidy sum on the sale of their larger homes.

In Sydney, Milsons Point, Mosman, Darling Point and the CBD had the highest proportion of cash-bought properties, while in Melbourne Toorak and Brighton were standouts.

Tree changers and sea changers have also been selling up in the city to buy in regional areas, ditching their mortgages in the process.

New platform lets Aussies cash out annual leave  

Australians have about 200 million days of accrued annual leave up their sleeve - a record high - but a platform has launched to make it easier for workers to cash that annual leave in.

A two-step process on Subi allows employees with more than 20 days of accumulated leave to claim those days off as cash, with Subi handling all approvals with employers.

The service is free, and the turnaround from claim to receiving the money is about 12 hours.

Businesses benefit from using the service too because it streamlines the notoriously complex and time-consuming problem of navigating leave entitlements and helps lower leave balances to manageable levels. About 30% of the workforce have a leave balance exceeding 20 days.

No-choice retirement 

Only about a third of people retire from full-time work when they'd like to, according to a Colonial First State survey, highlighting how factors outside their control can easily throw retirement plans into disarray.

Almost 30% of workers are forced to retire because of ill health, and 7% because of their partners' ill health.

Redundancy triggers retirement for 11% of people, and 4% leave their jobs because they no longer feel welcome in their workplace.

The survey also found that two-thirds of people plan to work beyond retirement age - some on reduced hours, others working unpaid on a passion project and still others working at the same level as they are now because they're asset rich but cash poor.

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Joanna Tovia is a freelance journalist. She is the former personal finance editor of The Daily Telegraph and author of Eco-Wise & Wealthy, a book about saving money by going green at home. She has worked as a journalist in the US, UK and Australia writing about money, travel, design and wellbeing. Connect with her on LinkedIn.
John Gilhooly
March 16, 2024 9.47am

Joanna, I believe you mean it is mortgagors who "wait with bated breath" not the banks.

Ron Nath
March 17, 2024 8.34pm

It's better RBA increases the rates and we go in recession sooner. It's unfair to mortgage holders to wait for long for inflation to come down. Where was RBA when inflation was going g up?? What else has RBA done to control inflation.

Please, Just increase the interest.