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RBA makes final cash rate call for 2024
The cash rate has now stayed at 4.35 per cent for over one year. Find out, in this special announcement brought to you by Legal Home Loans, if the Reserve Bank has finally opted to provide relief to millions of home owners ahead of the festive season.
Lawyers Weekly
After holding the cash rate in its November meeting, the board of the Reserve Bank of Australia has decided to hold the cash rate at 4.35 per cent ahead of Christmas and New Year’s.
“Growth in output has been weak. National accounts for the September quarter show that the economy grew by only 0.8 per cent over the past year. Outside of the COVID-19 pandemic, this is the slowest pace of growth since the early 1990s. Past declines in real disposable income and the ongoing effect of restrictive financial conditions continued to weigh on household consumption spending, particularly on discretionary items.
“A range of indicators suggest that labour market conditions remain tight; while those conditions have been easing gradually, some indicators have recently stabilised. The unemployment rate was 4.1 per cent in October, up from 3.5 per cent in late 2022. That said, employment grew strongly over the three months to October, the participation rate remains close to record highs, vacancies are still relatively high and average hours worked have stabilised. At the same time, some cyclical labour market indicators, including youth unemployment and underemployment rates, have recently declined.
“Wage pressures have eased more than expected in the November SMP. The rate of wages growth as measured by the Wage Price Index was 3.5 per cent over the year to the September quarter, a step down from the previous quarter, but labour productivity growth remains weak.
“Taking account of recent data, the board’s assessment is that monetary policy remains restrictive and is working as anticipated. Some of the upside risks to inflation appear to have eased, and while the level of aggregate demand still appears to be above the economy’s supply capacity, that gap continues to close.”
In conversation with Lawyers Weekly, Legal Home Loans general manager Aylin Unsal said the RBA’s decision to hold the cash rate today is “positive news”, providing stability for borrowers and aspiring home owners.
“With inflation now getting closer to the target for the RBA, signs are pointing towards a potential rate cut on the horizon,” she said.
“Some banks have already reduced their fixed and variable mortgage rates/offers. This is likely a forward-looking move, driven by expectations that interest rates may come down in 2025.
“If you’ve been considering purchasing property, now could be an ideal time to get your pre-approval organised.
“As interest rates eventually drop, demand is expected to rise, making it a more competitive market. By acting now, you could stay ahead of potential price increases and take advantage of any future rate reductions.”
She added: “Legal professionals can get ahead of the competition by leveraging exclusive benefits, such as home loans with just a 10 per cent deposit and waived lenders mortgage insurance.
“These advantages make entering the property market more attainable and realistic for the cohort. It’s best to speak to a specialist broker for lawyers to gauge what’s available for you.”
