The real estate peak body, the Real Estate Institute of Australia (REIA), predicts that the latest interest rate increase to 2.85% roughly 35 minutes before shock Melbourne Cup winner Gold Tip stunned the racing world, should signal the end of future hikes. 

REIA President Hayden Groves said that while the RBA acknowledged that higher interest rates and higher inflation are putting pressure on many households' budgets, CPI inflation over the years to September was still high at 7.3%. "We believe as the impact of higher mortgage repayments start to filter through, interest rates should remain stable in the near future," he said.  

According to the REIA, since May, repayments on a $500,000 mortgage have already increased by $700 a month, and household savings is forecast to slump below pre-pandemic levels. Inflation is forecast to peak at 7.75% in the December quarter of 2022 before easing below 3.5% by the June quarter of 2024 and moderate to 2.5% by 2024/25. 

Craig Betalli, Senior Broker from Our Broker, Raine & Horne's financial services arm, says, "The perspective from one of the major banks is that interest rates will rise to November. Then the RBA will stop and take a wait-and-see approach, followed by a reduction in the middle of next year.

 "The latest rate rise means the RBA is ahead of this prediction but behind the predicted position taken by other major lenders.  

"So, whether there are more rate rises in store is symbolic of the Melbourne Cup and having a bet each way."

 Craig continued that he is continuing to take the pulse of the economy and the property market by speaking with real agents, car sales dealers, shop owners and business owners. 

 "I'm also seeking feedback from the industry and lenders in the nonconforming or low-doc space, where loan activity is slower. 

"This lower activity level is expected as the customers of low doc lenders carry more inherent risk over someone who can prove their income by more "normal" means such as a wage or salary."

 He continued, "The activity in the luxury car market has slowed, while adverse weather conditions have caused sluggish retail conditions in parts of regional Australia. There are also fewer buyers in the higher-end coastal resort-style areas – but there are still buyers.

"Entry-level properties in regional markets are still attracting attention, and there are always people who need to buy or sell a property because their circumstances are changing due to an expanding family, a change of job, or they want to downsize.”