August financial wrap up
Our final winter month saw many of the money trends of the season continue with savings interest rates continuing to slide, energy expenses taking centre stage and property price talk ramping up with spring selling season upon us.
Catch up on the biggest finance news to surface in August below.
It was a big month of relatively bad news when it comes to personal money management. Mozo released its 2017 Rewards Card Survey, finding that rewards value had slipped by 67% over the past year and now offered an average net value of just $27 per year.
The pain continued for savers in August as we saw a host of banks make cuts to savings account rates. This included ME Bank who cut its previously market-leading ongoing bonus savings account rate by 10 basis-points to 2.95%. This leaves the market-leading rate for ongoing bonus savings accounts now at 3.00% offered by the RAMS Saver Account, AMP Bett3r Save Account and Australian Unity Active Saver.
The news hardly improves for those who prefer to keep their cash stashed away in a term deposit. With little competition for these investments, providers continued to cut term deposit rates. Some relief was provided by the ANZ however, who upped its 9-month Advance Notice Term Deposit rate by 50 basis points to 2.70%, just short of ME Bank’s market-leading 2.75% interest rate.
It turns out that Aussies are also losing out when it comes to currency exchange. New research from Capital Economics found that the average Aussie is spending $167 a year on unnecessary fees and additional costs to banks and lenders when converting currency. This prompted IMT provider, TransferWise to call on the Australian Government to stamp out deceptive practices in the currency exchange landscape. To make sure you’re getting the best possible deal on your exchange rate head to Mozo’s Foreign Exchange Calculator.
Home loan lending
Home loan customers, take note. Commonwealth Bank slashed its fixed home loan rates after recording bumper profits in August but its satisfaction levels are on the slide, according to Roy Morgan Research. The market research company reported that consumer satisfaction levels for home loan customers of the big four banks had slipped and revealed that Mozo People’s Choice Winner, Bendigo Bank had kept its mortgage customers the most happy of any major lender.
With the promise of an action-packed spring selling season peeking its head around the corner, there was some serious property chatter.
August revealed that if you’re looking to get into the property market you’ll have two big hurdles. Firstly, industry body HIA revealed that the average stamp duty bill had risen by 16.4% over the past 12 months to $20,725, despite dwelling prices rising by just 10.5%. But this isn’t even the biggest hurdle facing first home buyers according to Westpac’s Head of Consumer Banking, George Frazis who said saving for a deposit is the biggest battle when it comes to home ownership.
All the fuss about housing affordability shone a pretty bright light on younger Aussies who are becoming increasingly innovative. Research from Westpac showed that rentvesting - renting while owning an investment property in a more affordable area - had become a more popular option among young Aussies with the typical rentvester born between 1983 and 1997.
Winter brought unseasonably high clearance rates in Sydney and Melbourne, but by late August we began to see a dip in clearance rates which posed the question: are buyers spooked or setting up for spring? And finally, opinions are divided as to the future of Melbourne’s apartment market with three economists predicting a fall in apartment prices. Is now the time to get into the Melbourne property market?
The hottest topic of our coldest months, the Aussie energy crisis took centre stage with the PM meeting with energy providers twice in August to sort out soaring energy prices. In their initial meeting, Turnbull secured agreements with eight energy providers to offer customers the best possible deals, saying that in excess of a million Aussies are on needlessly expensive energy plans.
The PM held a second round of talks with energy heads late in the month to “see how they’re tracking in delivering” on these promises. This came after the Association of Superannuation Funds of Australia revealed that energy prices were a major factor in the rising costs of living for Aussie pensioners.
The best news on energy prices came for a select group of Aussies, only. South-east Queenslanders were given the opportunity to save 25% off their energy bills after Mozo Experts Choice Winner, Alinta Energy partnered with the Queensland state government, giving its customers the opportunity to save hundreds of dollars a year.
August was also the month of the Mozo Experts Choice Awards for the Best Electricity Plans of 2017 announcing the best electricity, greenpower and solar-friendly energy plans across the majority of Aussie states and territories. Make sure you’re on the best possible plan in the market by using Mozo’s Energy Comparison tool.