Borrowing power to get a welcome boost


Borrowing power to receive a boost, living costs take a toll in unexpected ways, and regional property prices outpace cities. Here are five things you may have missed this week.  

Rate cuts promise relief  

Things are looking up for those looking to break into the property market, with the big four banks all forecasting at least three 25 basis point cuts to the cash rate by the end of 2025.


This could boost borrowing power by $58,000 to $134,000, according to Canstar, depending on whether a loan application is being lodged by those with a single-income or double-income (assuming an income of $98,218 each).

Although it can be tempting to wait it out for rate cuts, Canstar's Steve Mickenbecker says buyers need to balance the borrowing power recovery with the potential property price surge.

"Interest rate increases of the past couple of years put home ownership plans on hold for many Aussies. Rate cuts will deliver a release from the holding pattern as buyers will be able to borrow more.

"First home buyers don't have the luxury of waiting as fear of missing out takes hold and they grapple with weighing up the borrower power recovery against rising home prices.

"Competing with investors who are piling into the market in anticipation of higher prices will be tough for first home buyers."

Teeth take a back seat  

When the cost of living goes up, something's got to give and, for many people, that means putting off going to the dentist.

Dental practices are feeling it, with 78% concerned that patient visits are being held back by economic uncertainty and cost of living pressures.

A new report released by the Commonwealth Bank and the Australian Dental Association found that dentists are getting more strategic in order to attract clients.

The research revealed that 81% were dedicating more funds to marketing, 38% were investing in or upgrading clinical technology, and 64% were extending their opening hours so they can offer evening appointments. 

Regional property prices outpace cities

The price of real estate has soared across the country since the pandemic began, with Queensland and South Australia leading the charge.

The latest analysis from PropTrack found that property prices have gone up 40% over the past four years, and that regional growth has outpaced that in cities. Homes in regional and urban areas in Queensland and South Australia have surged 60%.

In fact, prices in regional areas across the country have risen faster than capital cities in every state except Western Australia and the Northern Territory, driven by tree-changers and sea-changers as well as pandemic-induced remote working.

"The supply of properties for sale, population growth, building activity, rental market conditions, interest rates, and interstate and regional migration have all influenced home price growth as well as how it has been distributed Australia-wide since March 2020," says report author and PropTrack senior economist, Eleanor Creagh.

Reckless drivers 

As many as one in seven drivers don't have car insurance, and many more are ditching or downgrading their policies to reduce costs.

That's according to Finder's latest survey of 961 motorists which revealed that 16% of drivers - the equivalent of 2.9 million people - have cancelled or lowered their car insurance policies in the past 12 months because they're feeling the pinch from premium hikes and higher grocery, fuel and energy costs.

Car insurance premiums have gone up by an average of 10.6% in the past 12 months and almost 20% since the beginning of 2021, rising faster than the overall rate of inflation.

Almost one in ten drivers don't have cover beyond compulsory third party, putting them at risk of considerable expense in the case of an at-fault accident.

"Despite the strain, forgoing car insurance entirely leaves you financially exposed in case of accidents, thefts, flat tyres or even natural disasters," says Finder's Tim Bennett.

"Consider exploring your options before kicking car insurance to the kerb."

Increasing your excess, reviewing your extras (add-on benefits such as roadside assistance can jack up premiums), doing your best to maintain a clean driving record and shopping around for car insurance quotes are all actions you can take to reduce your car insurance premium.

Sole traders on struggle street 

Australia's 1.5 million sole traders are doing it tough this year, with incomes either stagnating or declining, but hope is on the horizon with the recent cash rate hold from the Reserve Bank.

Revenue decline has outweighed growth for the first time since the pandemic for self-employed consultants, freelancers, contract tradies and healthcare workers.

March data released by digital accountant and tax automation service Hnry, shows that only 56% of sole traders feel secure in their jobs though, down from 61% in October last year.

One in five are looking at giving up independent earning to work for someone else, despite the greater freedom and flexibility that comes with self-employment.

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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.