Interest rate forecasts looking positive

Interest rate forecasts looking positive

Author: Ben Reid - Manager VAA

As we look ahead at what the new year may hold for us, it is becoming increasingly likely that the news on official interest rates will become more positive the further into 2024 we go.

The Reserve Bank’s approach to slowing the economy in order to bring inflation under control has been a “short-term pain for long-term gain” philosophy, and it’s fair to say most Australian homeowners are more than familiar with the ‘pain’ side of that equation!

However, in recent months we have seen a growing number of economists beginning to turn their attention to the prospect of falls in official interest rates by the Reserve Bank, with the latest forecast from Australia’s largest home lender adding to the chorus.

In case you missed the coverage in the midst of the Christmas/New Year period, the Commonwealth Banks’ Chief Economist, Stephen Halmarick, has stated that they are expecting interest rates to begin falling in the second half of 2024, which will be welcome news to anyone with a mortgage or planning on taking one out.

The good news doesn’t stop there either. The Bank’s latest forecasts is that it not only expects the Reserve Bank to start cutting interest rates in September, but they are anticipating three-quarters of a percentage point in rate cuts before Christmas, and a further three-quarters of a percentage point in reductions early in 2025.

That would make your home loan a whole lot more comfortable in eighteen months’ time, wouldn’t it?

Of course, many Victorians will be looking at this outlook and thinking about making their next move before the Reserve Bank makes theirs in order to take advantage of less competitive market conditions. So if you’d like a quiet chat with one of the team at Ian Reid Buyer and Vendor Advocates about your options, you can call us on 9430 0000.

You’ll also find plenty of helpful tips for vendors in our free booklet, ”FATAL REAL ESTATE TRAPS EXPOSED”, so be sure to download a copy while you’re here.

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