Interest rate reprieve
Market ANALYSIS
Loan Market Excel Finance Broker Adam Wallace-Harrison provides his analysis on the latest Reserve Bank decision to hold rates.
The Reserve Bank of Australia just handed mortgage holders a surprise gift – no interest rate hike for the Christmas season! As 2023 draws to a close, the central bank decided to maintain the cash rate at 4.35 per cent until early February, bringing much needed relief at what’s often the most expensive time of year for most.
This decision comes on the heels of a 25-basis-point rise in November, marking a 12-year high for the cash rate. However, the current consensus is that the rate will remain at 4.35 per cent for the time being, with a potential modest easing cycle on the horizon by the end of 2024. Although optimism for a decrease exists, experts caution against ruling out the possibility of another rate hike (way to sit on the fence experts).
Economists predicted a pause in December following the previous month's increase, considering a slowdown in inflation, despite a robust performance in property prices during the September quarter. Treasurer Jim Chalmers welcomed the decision, recognising it as a cause for relief during a time traditionally burdened with financial pressures.
Sorry to be a Christmas Grinch… but for those locally waiting for prices to drop before buying, we're still seeing plenty of buyer enquiry and, due to the lack of supply, that demand does not appear to be easing anytime soon, which in turn will keep upward pressure on the housing prices.
While this temporary rate reprieve is a welcome relief for many existing mortgage holders, it doesn't dismiss the financial challenges some mortgage holders may still face this Christmas. Even with the positive outlook, we acknowledge the reality of financial stress. If you find yourself concerned about the rising cost of living or your ability to meet repayments, you don't have to face these challenges alone.
If this is you then I encourage you to reach out to your existing lender, mortgage broker or contact us at excel@loanmarket.com.au or via phone at 1300 003 414 to explore your options. Financial stress is not a nice place to be, so don't tackle it alone, you may have more options than you think.
Until next year Merry Christmas, enjoy your festive holidays and here’s to a happy and healthy 2024.
To get in touch with Adam call 1300 003 414 or email excel@loanmarket.com.au
