The Reserve Bank of Australia (RBA) has decided to maintain the official cash rate at 4.35% for the ninth consecutive meeting, indicating a shift in its previously aggressive stance on inflation. Governor Michele Bullock noted a deliberate change in the bank’s communication, expressing increased confidence that inflationary pressures are easing. While the RBA acknowledges improvements, it cautions that core inflation remains above desired levels and won’t return to the target midpoint until 2026.
Current economic forecasts suggest that any potential rate cuts are unlikely until mid-2025, leaving many homeowners burdened with higher repayments. The average borrower now faces monthly payments close to $4,000, a significant rise from earlier figures. Consumer sentiment appears to be rising, driven by economic relief measures, yet spending habits amidst high living costs concern analysts.
Experts predict that if interest rates begin to decrease, home prices may rebound, although an increase in prices is anticipated to be gradual. The outlook remains uncertain, with the RBA closely monitoring inflation trends before committing to any reductions in the cash rate. As borrowers await relief, many may struggle financially, especially during the festive season, with mounting pressure from ongoing mortgage costs.