Your Annual MoneyQuest Finance Roundup 2024

It seems like just yesterday we were saying goodbye to 2023 and ringing in 2024, but as the new year approaches and December flies by, it’s time to reflect on 2024, and prepare for a rapidly approaching 2025.

Olympic Glory

There’s been many highs, as Australia had its biggest medal haul ever at the 2024 Paris Olympics, just shy of a podium finish. However, the year also brought significant challenges, with international conflicts continuing to shape global affairs.

Global Political Shifts

The historic U.S. election saw Donald Trump reclaim the presidency, effective January 20, 2025. His economic policies, including trade tariffs and tax reforms, have sparked debate among experts, regarding their potential to combat or exacerbate inflation^[1] (Popli, 2024).

Inflation and Interest Rates

Inflation remained a global concern, with Australia starting 2024 with a Consumer Price Index (CPI) of 3.6%. Encouragingly, recent reports indicate inflation has fallen within the RBA’s band between 2-3%, signifying a potential cash rate cut may be on the cards. While this hasn’t equated just yet, this looks encouraging heading into 2025.

Despite this promising outlook, the cash rate, (which informs the interest rates imposed by lenders) held steady at 4.1% for a full year between November last year and this year, leaving Australian home owners to grapple with persistently high living costs. High inflation rates have meant the RBA is hesitant to drop the cash rate, and Aussie home owners have endured high living costs in 2024.

Tax Time

2024 saw the Albanese Government oversee the stage 3 tax cuts in 2024 , aimed to address Australia’s cost-of-living crisis, putting more cash back into the hands of more citizens. This was in direct response to Australia’s cost-of-living crisis. While every tax-paying Australian received a tax cut, the Albanese Government implemented several changes which included:

• Tax cuts for Australians earning $18,200–$50,000, who were previously ineligible
• Larger tax cuts for those earning $60,000–$140,000
• Reduced tax benefits for higher-income earners

Incentives for Businesses and Investors

Small and medium-sized business owners benefited from the Instant Asset Write-Off Scheme, enabling them to claim asset write offs valued under $20,000.

Overseas investors also received tax incentives from the Australian Government, as Prime Minister Albanese outlined plans to attract investors and developers towards Build-to-Rent Developments, aiming to alleviate pressure on the rental market.

Mortgage Brokers Gain Popularity as Banks Close Doors

As bank branches closed across the country, more home buyers turned to mortgage brokers instead of traditional banks. The Mortgage and Finance Association of Australia (MFAA) has highlighted this definitive market share, reflecting the choice and integrity that mortgage brokers offer their clients.

The shift toward mortgage brokers continued throughout 2024, with more than 7 out of 10 home loans being written by mortgage brokers, according to the MFAA’s 2024 annual report. This reflects Australians’ growing preference for the tailored support that mortgage brokers provide.

Meanwhile, the Bank of Queensland closed all member-owned branches and laid off 400 staff, underscoring the broader trend of banks downsizing^[2] (Baird, 2024).

National Rise in Home Values

The Australian property market got more expensive this year, rising 6% nationally in 2024, but growth varied by region:

• Brisbane, Adelaide, and Perth saw significant increases (13%, 15%, and 22%, respectively).
• Melbourne, Hobart, and Darwin experienced slight declines (-1.9%, -1.2%, and -0.1%).

The median dwelling values in Brisbane, Adelaide and Perth were momentous, while, Melbourne, Hobart, and Darwin witnessed a net drop in home values.

This highlights a rapid rise in values in the medium-sized capital cities, while the larger capitals saw slower growth, or even losses. It will be interesting to see if the market pivots in the coming year, potentially becoming more accessible to buyers ^[3] (Corelogic, 2024).

State Developments Produce Mixed Results

State elections took place in Tasmania, Queensland, and the Australian Capital Territory (ACT), with the defending governments making big strides to appeal to voters.

Tasmania:

Jeremy Rockliffe’s Liberal Government retained power but failed to secure a majority, resulting in a hung parliament. ^[4] (ABC, 2024). Key issues, like the $6.1 billion deficit, remained unaddressed by either party,^[5] (Langenberg, 2024) despite Labor offering a shared equity scheme, which aims to tackle housing affordability, but doesn’t address existing mortgage stress^[6] (Lohberger, 2024).

Queensland:

Labor’s first home buyer incentives, such as raising the Transfer Duty concession cap, failed to secure them re-election, with Steven Miles being defeated by Liberal challenger, David Crisafulli.

ACT:

Labor retains a historic 27-year reign, holding just one more seat than the coalition, though neither party was able to form a majority government. Labor will now rely on the support of  the Greens and independent crossbenchers ^[7]  (Shteyman, 2024). The ACT Government has committed to increasing housing opportunities for Canberrans ^[8] (ACT Government, 2024).

Looking Ahead to 2025

2024 proved to be a year defined by resilience, as we collectively continued to navigate post-pandemic economic challenges. With inflation easing and the potential for interest rate reductions growing, 2025 could be a promising year for home buyers, home owners and investors alike.

It’s important to remember – whether you’re looking to buy your first home, invest in property or refinance to a more competitive rate, your local MoneyQuest mortgage broker and finance specialist is here to guide you through your finance journey. Start 2025 right with finance solutions tailored to you!

[1] Popli, Nik. What Donald Trump’s Win Means for the Economy, Time Magazine. 6th November 2024. Viewed 28th November 2024.

[2] Baird, Lucas. Business model unsustainable, says BoQ, as it sacks 400 staff, Australian Financial Review. 22nd August 2024. Viewed 28th November 2024.

[3] Sydney home values slip in October as market cooldown continues. Corelogic. 1st November 2024. Viewed 28th November 2024.

[4] Tasmania Election 2024 Results. ABC. Updated 6th April 2024. Viewed 28th November 2024.

[5] Langenberg, Adam. Economist rebuke for Tasmanian Liberals, Labor over failure to address dire economic forecast during election campaign. ABC. 22nd March 2024. Viewed 28th November 2024.

[6] Lohberger, Loretta. Tasmanian Labor says its shared equity scheme will help more people into home ownership — but will it work?  ABC. 11th March 2024. Viewed 28th November 2024.

[7] Shteyman, Jacob Triumphant Labor extends reign to 27 years in ACT. AAP. 20th October 2024. Viewed 28th November 2024.

[8] More than 21,000 new homes for Canberrans. ACT Government. 19th June 2024. Viewed 28th November 2024

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