The Reserve Bank of Australia (RBA) decided to keep interest rates unchanged for the third consecutive meeting, but left the door open to future policy direction, "not ruling anything out." This decision was in line with market expectations, with all 41 economists surveyed by Finder predicting the official cash rate would remain at its current level of 4.35%.
Since November 2023, the Reserve Bank of Australia (RBA) has not adjusted the cash rate since it raised it by 0.25% to its current level. While financial markets generally expect the RBA to begin cutting interest rates in September, the bank has not ruled out another rate hike. The current inflation rate of 4.1%, well above the RBA's target range of 2% to 3%, increases the likelihood of another rate hike.
In announcing the decision, RBA Governor Michele Bullock reminded Australians that "while signs of easing inflation are encouraging, the economic outlook remains uncertain." The RBA remains focused on controlling inflation, with the board emphasizing that "keeping inflation within the target range within a reasonable timeframe" is its top priority. ANZ CEO Shayne Elliott believes that inflation continues to plague the Australian economy. He stated, "I believe the next step is likely to be a rate cut, but I cannot completely rule out the possibility of an unexpected event." Economists such as Judo Bank believe that due to persistently high inflation, the first rate cut may be delayed until 2025.
Australian real estate data analysis think tank CoreLogic recently surveyed more than 1,400 real estate professionals to study their outlook on the economic landscape, property market and business goals in 2024. More than 70% (71%) of real estate professionals expect interest rates to have the most significant impact on the real estate market in 2024.
CoreLogic's head of Australian residential research, Eliza Owen, said: "There remains a significant mismatch between housing supply and demand across Australia, and anything that makes buying a home easier, such as interest rate cuts, is likely to boost the number of buyers."
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