Cutting interest rates could push up house prices

Long-awaited rate cut could see home prices jump $15,300, new crackdown on shrinkflation, and the number of Aussie women who invest has jumped at twice the rate of men. Here are five things you may have missed this week.

Rate cuts could push up home prices by $15,000

Consensus is growing that the next move for interest rates will be down, with Westpac and NAB both predicting rates to fall in the first half of 2025.

The Commonwealth Bank expects a rate cut in time for Christmas.

Lower rates can't come soon enough for many home owners. But they may not be such good news for home buyers.

Property prices may be easing at present, however Ray White Economics has looked at how property values have responded to rate cuts in the past, finding that home prices nationally could jump 0.6% in just the first month following a rate cut.

Based on current median values, REA Group says this may add an extra $5000 to the average cost of a home across Australia.

In Sydney, prices could jump 1.4%, potentially pushing up the median price by $15,300.

In Melbourne values may rise 1.0% following a rate cut, leading to an $8000 price increase. Brisbane home values could gain an extra 0.4%, possibly adding $3400 to the city's median price.

Federal government to fight shrinkflation

'Shrinkflation', where the size of a product is reduced but the price stays the same or even increases, is becoming increasingly common in Australia.

Earlier this year consumer group CHOICE identified a number of products that had fallen prey to shrinkflation.

Coles' own brand of corn flakes, for instance, shrank from 475 grams in October 2022 to 440 grams in March 2023. Meanwhile, the price went in the opposite direction, increasing 20 cents to $2.10.

Now the federal government is stepping in to fight shrinkflation.

It plans to strengthen the Unit Pricing Code to make it easier for Australians to compare between products.

Unit pricing helps shoppers spot value for money by displaying the price of products by their volume, weight or per unit. An ACCC survey found 90% of consumers use unit pricing when deciding which products to buy.

New rules will improve the readability and visibility of unit pricing in stores, and shops that flout the rules can be hit with hefty penalties.

Assistant Treasurer Stephen Jones says, "Misleading practices around pricing are illegal and completely inappropriate. The bar needs to be raised significantly. Australian consumers deserve fair prices, not dodgy discounts."

The number of women investors has grown at twice the rate of men

New data from CommSec shows the number of Australian women who hold investments has jumped 18% -  double the rate for men - over the past three years.

Women now account for 42% of active CommSec accounts.

However, for one in three Australians lack of guidance is the biggest barrier to investing, showing the need for educational support.

To help women grow their money, CommBank has developed partnerships with Girls that Invest to give customers access to investment-focused content on the CommBank website and app, and Sophia, a women-focused financial education platform.

CommBank's executive general manager of wealth and private, Susie Grehl, says,  "We know women face unique factors which are often underrepresented in traditional thinking about wealth such as time spent out of the workforce or longer life expectancy.

"Our clients are confident, informed women who see investing as a fundamental tool to achieving the life they want," adds Grehl.

Super fund retirement calculators failing to help people plan for retirement

Super Consumers Australia (SCA) says plenty of super fund retirement calculators are failing to answer one of the most basic questions: "Is my superannuation balance enough to retire on?"

SCA found 77% of calculators use a default retirement income that is either too high, meaning super savings wouldn't last the distance, or too low, which can see retirees still having a solid chunk of untouched super by age 100.

No fund calculators factored in government support available for retirees who are renters, and 73% failed to ask about whether the fund member has a mortgage.

"Planning for retirement is too important to just leave to super funds with a track record of poor quality guidance," says Xavier O'Halloran, CEO of Super Consumers Australia.

"Our findings cast doubt on whether super funds have the capability to provide quality tools and guidance to help their members plan for retirement."

Super Consumers Australia is calling for a free and independent one-stop-shop to help all Australians plan their super and retirement.

Meanwhile, Australians have expressed tremendous support for our current super system.

Research by AustralianSuper shows only one third (32%) of people believe they would be able to save for their retirement without the benefit of compulsory superannuation.

$50,000 grants for NT home buyers

Territorians can now access some of the nation's most generous housing grants.

October saw the launch of the NT government's new HomeGrown Territory and Fresh Start New Home programs spanning three different grants ranging from $10,000 to $50,000.

At the top end of the scale, first home buyers can be eligible for a $50,000 grant when they build or buy a new home in the Territory, or $10,000 if they buy an established home.

In a first for the Territory, the program also includes a FreshStart New Home Grant of $30,000 available to home buyers who may have already owned a property before, to purchase or build a new home.

The grants, which are designed to boost the local construction industry and encourage people to live in the Territory, will run for 12 months until September 30, 2025.

The Northern Territory's median home price of $492,332 is the lowest across Australia, and significantly below the national median of $807,110.

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