For most Australian households, 2025 has felt like yet another year of “doing more with less”. Power bills are only bearable because of government rebates, the weekly grocery shop still stings, rents are at record highs, and anyone with a mortgage is watching every Reserve Bank meeting like a season finale.
As the year closes, the big question is whether genuine relief is finally on the way – or whether the cost-of-living squeeze is now the “new normal”.
Where prices are still biting
The latest numbers from the Australian Bureau of Statistics show inflation running at 3.8% in the 12 months to October 2025, up from 3.6% a month earlier. Housing costs are the biggest driver, up 5.9% over the year, with food and non-alcoholic beverages and recreation also adding to the pressure. Australian Bureau of Statistics
Underlying (trimmed mean) inflation – the RBA’s preferred measure – is still above the 2–3% target band at about 3.3%, and trending slightly higher, a sign that price pressures are proving sticky rather than fading away.
Behind those averages are a few day-to-day pain points:
