November 5th is undoubtedly a big day on multiple fronts. It’s the presidential election in the US, with Kamala Harris facing off against Donald Trump. Closer to home, the Melbourne Cup sees Caulfield Cup runner-up Buckaroo competing against the impressive Bendigo Cup winner, Sea King, in the race that “stops the nation”.

Meanwhile, on the local economic front, Reserve Bank Governor Michele Bullock and the central bank’s board are pitted against Aussie property owners with mortgages. These owners are also struggling with 13 interest rate hikes since May 2022[i], as well as other cost-of-living challenges such as high energy and fuel prices, as well as price gouging by the big supermarket chains[ii].

Interestingly, there’s a rich history connecting the race that stops the nation with Australia’s central bank. Since 1990, the RBA’s form guide shows that the central bank has adjusted monetary policy a remarkable 13 times on the first Tuesday in November including four years in a row, 2006 (+0.25%), 2007 (+0.25%), 2008 (0.75%) and 2009 (+0.25). Many punters (ahem, property owners) will be hoping Ms Bullock and her board step away from the Cup form guide just long enough to deliver a windfall of her own next Tuesday—a favourable rate cut of at 0.25%.

Reflecting on this history, Angus Raine, Executive Chairman of Raine & Horne, points out that the RBA has acted on interest rates three times already this decade on the first Tuesday of November, including in 2020 (-0.15%), 2022 (+0.25%) and last year’s 25 basis point increase, thankfully the last in the most recent cycle of hikes.

“With the Australian Bureau of Statistics (ABS) reporting that consumer price index (CPI) is now running at 2.8% annually[iii] – bringing inflation within the RBS’s target band of 2-3% - we must be getting closer to giving mortgage holders some relief, especially those struggling with other cost of living pressures,” Angus commented.

“Also, let’s not forget that summer is just around the corner—a season notorious for higher spending leading up to the festive season. So, a bit of financial help from the RBA through a rate cut on Cup Day would provide some overdue relief.”

Moreover, real estate values seem to have taken a bit of a breather because of the RBA’s 13 rate hikes from May 2022 to November 2023. According to CoreLogic, while mid-sized capitals led by Perth (1.4%), Adelaide (1.1%) and Hobart (0.8%) enjoyed monthly increases, these were offset by declines in Darwin (-1.0%), Canberra (-0.3%), Melbourne (-0.2%), Sydney (-0.1%), and regional Victoria (-0.2%).

Angus added, “Slowing inflation and a more stable real estate market could be enough for the RBA to act and give all Aussies with a home loan the chance of winning on Melbourne Cup Day.

“If not on Cup Day, then borrowers should be able to start anticipating that a rate cut cannot be far away and hopefully as early as the next RBA meeting on December 10th.”

For an obligation-free appraisal of your property’s value for a pre-Christmas sale, contact your local Raine & Horne office today.

[i] https://www.rba.gov.au/statistics/cash-rate/#cash-rate-chart

[ii] https://www.abc.net.au/news/2024-10-02/super-power-revealing-the-tactics-of-colesworth/104174394

[iii] https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release