Anchoring Bias in Finance: How Aussies Can Outsmart This Hidden Trap in 2025

Ever found yourself fixated on the first price you hear for a house, even after seeing better deals? Or clung to a stock’s previous high, resisting the urge to sell? Chances are, you’ve experienced anchoring bias—a psychological pitfall that can quietly cost Australians thousands every year.

What Is Anchoring Bias, and Why Does It Matter?

Anchoring bias is our tendency to rely too heavily on the first piece of information (the ‘anchor’) we receive when making decisions. In finance, that anchor can be a price, a forecast, or even a friend’s opinion. It’s not just theory: numerous studies confirm that anchors can unconsciously skew our judgments, even when we know they’re irrelevant.

For example, if the first home you view is listed at $900,000, you might judge all subsequent homes against that figure—regardless of location, size, or market trends. This bias is so pervasive that the Australian Securities and Investments Commission (ASIC) has highlighted anchoring as a key risk in investor behaviour, especially in volatile markets.

Real-World Examples: Anchoring in the Australian Financial Landscape

• Property Prices: As Australia’s property market stabilises in 2025 after recent rate hikes, many buyers are still anchored to the boom-era prices of 2021–22. This can lead to overbidding or missed opportunities as new market realities set in.

• Interest Rates: With the Reserve Bank of Australia (RBA) holding the cash rate steady at 4.35% in early 2025, some borrowers continue to anchor to the ultra-low rates of 2020, hesitating to refinance or lock in fixed rates despite shifting conditions.

• Superannuation Balances: After the market volatility of 2022–23, many Aussies still compare their current super balances to pre-pandemic highs, influencing their contribution strategies or risk tolerance—even though markets have since rebounded.

Even financial professionals aren’t immune. A 2024 survey by the Financial Planning Association of Australia found that over 60% of planners admitted to being influenced by initial client-provided figures when setting goals or making recommendations.

How to Outsmart Anchoring Bias in 2025

While anchoring is deeply rooted in human psychology, there are proven ways to reduce its impact on your financial life. Here are actionable strategies for Australians:

• Seek Multiple Data Points: Don’t rely solely on the first price, forecast, or offer you see. Use comparison tools (like realestate.com.au for property or Canstar for loans) to broaden your perspective.

• Set Pre-Defined Criteria: Before viewing homes or making investments, write down what matters most—budget, returns, location. Refer back to this list to anchor decisions to your real needs, not external figures.

• Pause and Re-Evaluate: If you feel drawn to the first number you encounter, take a step back. Ask yourself: would this decision make sense if I hadn’t seen that initial figure?

• Leverage Professional Advice: Financial advisers and mortgage brokers can provide context and benchmark data to help you avoid common anchoring traps. In 2025, many now use behavioural finance tools to identify and counteract biases in client decisions.

Anchoring and Financial Policy: What’s Changing in 2025?

Australian policymakers are increasingly aware of behavioural biases in consumer finance. In 2025, ASIC’s new Consumer Outcomes Framework specifically addresses cognitive traps like anchoring in its guidelines for financial product disclosures and advertising. This means lenders, insurers, and investment platforms are now required to present key figures (interest rates, fees, historical returns) with greater context—reducing the risk that you’ll fixate on a misleading anchor.

Additionally, the federal government’s MoneySmart program has launched fresh campaigns in 2025, educating Aussies about anchoring and other behavioural biases through interactive budgeting tools and workshops.

Conclusion

Anchoring bias might be invisible, but its impact on your finances is very real. By recognising this quirk of human psychology—and using strategies to counter it—you can make smarter, more confident money decisions in 2025 and beyond.