Cash rate cuts bring relief to some, but housing pressures persist for many
Australia’s cost-of-living crisis may be easing for some, but new data from Finder’s latest RBA Cash Rate Survey points to a growing divide between property owners and renters, with experts warning the country is entering a two-tier economy.
“Whether the cost-of-living crisis is over really depends on who you ask,” said Graham Cooke (pictured), head of consumer research at Finder. “While Finder’s Cost of Living Pressure Gauge shows that cost pressures are easing, rents are still sky-high and relief is being more directly felt by homeowners. The property class divide in Australia is widening.”
According to adjunct professor Noel Whittaker from the Queensland University of Technology, income inequality is becoming more entrenched. “We are living in very much a two-tier society, and the gaps between the haves and the have-nots appear to be widening,” he said.
Among 34 economists surveyed, a vast majority (88%) expect the Reserve Bank to lower the cash rate to 3.60% today. While many noted signs of financial improvement across households, almost half (44%) of those who commented on cost-of-living said the crisis is effectively over – but only for a portion of the population.
Finder’s Consumer Sentiment Tracker shows average monthly savings hit a record $932 in June 2025, up from $614 two years ago. Mortgage stress has also dropped to 34%, the lowest level since mid-2023. But experts say the benefits are not being felt equally.
While savings are on the rise overall, Finder’s research shows that 43% of Australians have less than $1,000 in reserve, and 18% have no savings at all. University of Sydney economist Stella Huangfu noted that many households continue to face financial stress despite improving headline numbers.
“Additionally, the cost of essential goods and services remains high,” Huangfu said. “Experts predict that grocery prices are unlikely to decrease in 2025, and real household disposable income has declined by nearly 10% since its peak, indicating that many Australians are still struggling to keep up with living expenses.”
Several economists argued that housing is at the heart of the problem. Kyle Rodda from Capital.com said the crisis is increasingly defined by access to property.
“If you rent, things are tough. If you are leveraged to your eyeballs on your home, things are tough,” Rodda said. “Given the housing problem is supply driven and there's not much being done to address that, then the ‘crisis’ is likely to continue.”
Jakob Madsen from the University of Western Australia agreed that housing was the main pressure point, though he downplayed the scale of the crisis compared to past decades.
“The exception is some rentiers and new entrants into the housing market have experienced marked increasing costs,” he said. “But this is all caused by the escalation of house prices, not a general increase in the real value of pensions and wages.”
Cooke said that while further rate cuts could bring relief, structural issues in the housing market may continue to deepen financial inequality.
“While we are not out of the woods yet, there is definitely light at the end of the tunnel,” he said. “A few more rate cuts will be required, but renters may still be left with higher costs.”
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