The Rise & Fall of Living Costs

Posted on December 11th, 2012 · Posted in News

Millions of families are much better off this Christmas with recent interest rate cuts far outweighing skyrocketing utility bills.

A new analysis shows that when savings from rate cuts are put up against increases in electricity and gas prices in the past year, average mortgage holders come out $1,390 on top. The analysis, compiled by the National Centre for Social and Economic Modelling at the University of Canberra, shows that variable interest rates have dropped 1.35% since October last year.  For average families that have mortgages this saves about $1,782 a year, the same time they were slugged with $392 in energy bill hikes – one of the major cost of living concerns.

The average Australian mortgage is around $300,000. NATSEM research fellow Ben Phillips said that even with other price pressures added in, “the Australian standard of living has never been better”.  He said the cost of living has not moved much in the past year for most families, while wages have risen by about 3.7%.  “People see their electricity and gas bills, and they are big increases, but there’s all these other things that they don’t notice,” he said.  “Even though pressures from electricity and gas are high there are other items that compensate – particularly imported goods such as clothes, shoes and electronic goods.”

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