As its first decision of the year, The Reserve Bank of Australia (RBA) elected to hold the official cash rate steady at 4.35%. This meeting is the first of the central bank’s new schedule. Going forward, the RBA will meet every 6 weeks, totalling 8 meetings annually, rather than 11. This is so the board has more time to assess the economic impacts their last rate decision; and with fewer cash rate changes, there will be more time for mortgage holders to adapt to increases.
Commenting on the decision, PropTrack economist Anne Flaherty said, “While interest rates appear to have peaked, two years of high inflation have eroded real wages and, as of September, the household saving to income ratio was sitting at just 1.1%. This is the lowest level seen since December 2007 at the onset of the Global Financial Crisis.”
Despite this, property prices are expected to continue growing, with Perth and Brisbane predicted to be the top performers over the next 12 months. Oxford Economics anticipates that property prices in Perth will increase 9.1% this year, followed by Brisbane seeing values rise 4%. Meanwhile, Sydney sits at 2.6% expected growth, Adelaide at 1.4% and Melbourne at 0.9%. Overall, the capital cities are predicted to increase in value by 2.7% in 2024.
