Mortgage holders are unlikely to receive an early Christmas present when the Reserve Bank of Australia meets next week, according to a survey of economists. All 40 experts polled by comparison site Finder predict the central bank will keep interest rates unchanged at 4.35% when it concludes its final board meeting of the year on Tuesday. Nearly half of respondents expect Australians will have to wait until May next year for the first rate cut, while 24% predict further cuts after that.
All 40 experts surveyed by comparison site Finder said the central bank will keep interest rates on hold at 4.35 per cent when it concludes its final board meeting of the year on Tuesday. (Photo: Tara Blancato) Finder head of consumer research Graham Cooke said hopes were high that interest rates would fall sharply this financial year after a tough 12 months for most Australians. “The cost of living crisis continues to put huge pressure on households. Younger Australians – particularly those who rent, pay a mortgage or have children – are feeling the pinch the most. “The good news is that Australians are likely to see interest rates fall this financial year. Most experts on our panel expect the first rate cut to occur within the first three meetings next year.”
Struggling homeowners may have to wait until May next year for a rate cut, according to a new expert survey. (Angus Gray) (Channel 9) One of the experts polled by Finder, AMP’s Shane Oliver, predicted a rate cut in May but said current economic conditions gave the RBA room to cut earlier. “With inflation trending down and growth weaker than expected, we think the RBA should cut earlier and a February cut remains a strong possibility,” he said. The panel also offered financial advice to a friend for next year. Richard Holden of the University of New South Wales simply said “pray”. But others gave more detailed guidance. “Save money don’t spend it. Focus on necessities, not nice-to-haves. Teach your children the basics of financial management, including how to save money,” said Peter Boehm of Pathfinder Consulting.Potential homebuyers are being advised to act now. “If you want to buy a property, buy before interest rates drop,” said Matt Turner of GSC Finance Solutions. “We have a clear sense from our client base that once the first rate cut occurs, there will be renewed optimism in the property market, which will certainly act as a psychological barrier to attract buyers back into the market.” More than half of the experts surveyed (58%) believe that most Australians will be better off financially next year.