This week, as Australians contend with the sharp economic pressures and rising living costs, the Reserve Bank of Australia (RBA) provided some respite to borrowers by keeping the cash rate steady at 4.35%. 

Financial markets had largely anticipated this decision, with economists’ consensus being that it was a matter of when, not if, the central bank would implement a rate cut. Shane Oliver, Chief Economist and head of Investment Strategy at AMP said, “We continue to see the trend in inflation remaining down, ultimately helping to avert another rate hike and allowing the RBA to start cutting rates in November or December (with a 0.25% cut to 4.1%).”

In her statement, RBA Governor Michele Bullock emphasised the need for further data to accurately assess the economic and inflationary landscape before a potential cut to interest rates could be considered. 

Yet despite the rate armistice, the financial strain continues for many Australians. According to the financial comparison website Finder’s Cost of Living Pressure Gauge, 36% of homeowners reported difficulties meeting mortgage repayments in April. Renters face even steeper challenges, with 42% struggling to keep up with rent payments.

Craig Betalli, Senior Broker at Our Broker, advised borrowers not to wait for the RBA to cut rates. “If borrowers decide to delay until the Reserve Bank cuts the cash rate, they risk losing the opportunity to save thousands of dollars on their home loans,” he said.

“By refinancing now with the help of financial specialists such as Our Broker, individual property owners can stay ahead of the RBA and secure their own rate cut this winter.”

Local development opposition driving property prices up

Interestingly, this month’s Finder RBA Cash Rate Survey™ also found that most experts surveyed (58%) pointed out that opposition to local development has driven up property prices. 

Angus Raine, Executive Chairman of Raine & Horne, stressed that development red tape has been an issue for many years. “We’ve all heard the horror stories about development applications dragging on for months or more. Any measures that can streamline these procedures while also tackling affordability issues are crucial,” he said. 

Angus further noted that development delays are not solely due to council red tape but are also impacted by shortages of construction materials and labour, as well as rising interest rates.

“The decision by the Reserve Bank to maintain rate stability should encourage more listings as we are still at historically low sales transactions and hopefully this will help address the supply and affordability issues too.”

If you’re considering selling a property before winter, contact your local Raine & Horne agent today for an obligation-free appraisal.