Adaptability is a hallmark of Aussie character, says industry veteran
As 2025 draws to a close, it’s important to pause and reflect on what has been one of the most challenging yet defining years for Australian households and the finance industry.
Persistent inflation and a cycle of interest rate rises placed enormous pressure on families, forcing many to rethink budgets and make tough choices.
Despite these headwinds, Australians have shown remarkable resilience. They’ve adapted, innovated and found ways to keep moving forward – whether that’s refinancing, consolidating debt or exploring new ways to manage household costs. This adaptability is a hallmark of our national character and a reason for optimism as we look to the future.
The reality of rising costs
The recent cycle of high inflation and substantial interest rate rises has tested the resilience of countless Australians. Everyday costs have climbed, mortgage repayments have surged, and financial priorities have shifted. For many, navigating this environment has felt overwhelming.
Yet within these challenges lie opportunities. For some, consolidating debt, managing tax obligations and accessing tailored solutions can be transformative. It’s not just about overcoming hardship – it’s about creating pathways to financial freedom and confidence.
Through it all, brokers have been the steady hand – helping people navigate uncertainty, stay on track and keep their goals in reach. Whether it’s buying a home, upgrading a car, growing a business or starting again, brokers have been key to helping Australians move forward.
Financial literacy matters
The pressure on discretionary spending has also led to a rise in insolvency among households. This trend underscores the importance of financial literacy and preparedness.
As an industry, we must work together to equip consumers with the knowledge and tools they need to make informed decisions. Empowering individuals is critical to building a resilient economy.
Strong demand, tight supply
Despite economic pressures, the housing market held firm. After sharp interest rate hikes in 2022–23, the cash rate peaked at 4.35% in late 2023 before easing to 3.6% in August 2025. That shift helped lift buyer confidence and borrowing capacity.
Home prices are rising again, with CoreLogic data showing a 6.1% annual increase by October. Several capital cities hit record highs, and the national median home value now sits in the mid-$800,000s. Tight supply – new listings were down 8–12% year-on-year – combined with strong population growth (up over 600,000, mostly from migration) has kept upward pressure on prices.
Borrowers are holding steady. Most are meeting repayments on time, and loan arrears remain low. The RBA’s April 2025 review shows mortgage stress is back to pre-pandemic levels, with fewer than 1% of borrowers in negative equity.
Asset finance brokers in the driver’s seat
On the other hand, the auto market in 2025 reflects cautious optimism. New-car sales dipped slightly after 2024’s record highs, as cost-of-living pressures and higher rates make buyers think twice. People are taking longer to decide, with value, reliability and transparency front of mind.
Electrification is still the bright spot. Hybrids and plug-in hybrids are picking up pace, while battery EV growth is steady given affordability and charging hurdles. In the used-car space, demand is stable, driven by price-conscious buyers and better dealer stock, creating a more balanced market.
The creative financing solutions that many lenders have developed this year highlight the industry’s ability to pivot and respond to market demands. In this environment, non-bank lenders are gaining ground by offering fast digital approvals and tailored products. In a market driven by choice, asset finance brokers are in the driver’s seat – helping customers navigate new possibilities.
A stronger, more adaptable industry
Finance in Australia has changed – for good. The mix of banks, non-banks, fintechs and record broker market share has created real choice for customers. That’s a good thing. It keeps us all focused on what matters: understanding people and helping them find the right solution for their needs.
That adaptability is our biggest strength. Technology, data and new ways of working are making it easier and faster to deliver finance that fits people’s real lives. But empathy and integrity still matter most. Balancing efficiency with understanding is what earns trust – and that’s what will set us apart in 2026 and beyond.
Smarter technology, human at heart
Artificial intelligence (AI) is changing the world of finance faster than any of us imagined. Analysis by the Australian Finance Industry Association (AFIA) found that AI could add as much as $60 billion to Australia’s GDP over the next decade, a productivity dividend that highlights how technological transformation can fuel economic growth.
Used wisely, AI can help us understand customers better, make decisions faster and reduce friction. But it’s not about replacing people. It’s about supporting them. Technology should make finance feel more personal, not less. That’s the balance Pepper continues to champion – innovation with a human heart.
Inclusion and competition go hand in hand
Access to finance changes lives. Whether someone’s self-employed, has a complex income structure or is starting again – they deserve a fair shot. That’s where brokers come in. Your independence and expertise give Australians real choice. As finance becomes more data-driven, your role will only grow.
Non-bank lenders are a vital part of that choice. They offer flexible options for people who do and don’t fit the traditional mould, helping make finance fairer and more inclusive.
When a lender’s policies, products and approach align with a client’s situation – whether that’s complex income structures, past credit events or a non-standard scenario – the broker can move forward with confidence. Strong client fit means fewer surprises, smoother approvals and a better overall experience for the customer, which in turn strengthens the broker’s reputation for finding the right solution the first time.
This isn’t just about lending. It’s about listening, understanding and responding to real needs. So, as borrower needs shift and the market evolves, one thing stays true: Australians need lenders – and brokers – who understand real life.
What 2026 holds
While the challenges posed by rising interest rates and high inflation cannot be understated, they also signal an opportunity for growth and renewal. More customers want solutions that help them move on from the challenges of the past few years and get back on track financially. Non-bank lenders are meeting the demand for flexible mortgage loan options.
Demand for used cars should stay strong as affordability remains a challenge, though price adjustments might slow down growth. Electrified vehicles will keep gaining ground thanks to manufacturer and government incentives, novated leasing and falling EV prices, with hybrids leading the way.
Overall, buyers are moving towards cautious confidence, with competitive pricing, flexible finance and digital-first experiences shaping their choices.
As the year winds down, it’s a good time for Australians to take stock of their finances. Brokers have a great opportunity to check in, keep the conversation going and help them feel confident about what’s next.
Let’s use this moment to lead with action – putting customers at the centre of every decision. By committing to genuine customer focus, we can reshape the way we do business and give Australians the confidence and support they need to achieve their financial goals.
