APOLLO BAY- HERE AND THERE

Recent announcements that RBA governor Philip Lowe’s term will not be extended, with current deputy governor Michele Bullock to take over the top role from 18 September has seen a major shakeup of the Reserve Bank of Australia that will see a woman lead the central bank for the first time, fewer interest rate decisions and regular press conferences, with the new RBA governor to be publicly grilled on the outcome of each meeting.

The RBA has held interest rates steady again this month as homeowners around the country breathe a palpable sigh of relief, but experts have warned that the Reserve Bank’s decision to keep interest rates on hold at the July & August meetings are not a sign future hikes are not on the horizon, but it has paved the way for buyer confidence to strengthen. PropTrack Senior Economist Paul Ryan said the current consensus was that the RBA was pretty close to the peak in the cash rate.

From February, the RBA board will meet on interest rates eight times a year, down from 11 currently. Fewer meetings could mean fewer interest rate decisions,
it could also make the bank less agile and mean larger moves become more common.

The RBA estimates around 800,000 fixed rate mortgages worth $350 billion are set to expire this year, with borrowers rolling onto much higher interest rates.

Economists are divided over the path forward for interest rates, with the consensus for one or two more hikes over August and September, before cuts next year.  Some economists expect the cash rate will return to the low 3s by the end of 2024, providing some relief for borrowers who have seen their monthly repayments jump almost 60% since May 2022.

Westpac is forecasting a further two rate hikes to a peak of 4.6%, but sees cuts earlier than ANZ, by the middle of next year, with the cash rate tipped to end 2024 at 3.85%.

“We confirm our call that, following the hikes in August and September, rates will remain on hold until May next year when conditions will allow the Board to begin easing,” Westpac chief economist Bill Evans said.

Here’s what some the nation’s leading economists predict:

Property values can change quickly, so if it would assist your forward financial planning to have a personal update, please contact any of our agents.  It will be our pleasure to help.

Kind regards,

Darren Brimacombe
For and on behalf of the entire Great Ocean Road Real Estate team

APOLLO BAY- QUOTE OF THE WEEK

“If life was a book; every day would be a new page, every month would be a new chapter, and every year would be a new series.”

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