Hi,
Good news for borrowers today with the Reserve Bank of Australia cutting interest rates for the first time in four years. The cash rate has been reduced by 0.25% to 4.10%. Banks have recently been lowering their mortgage rates in anticipation of the interest rate cut today and it is speculated that the big banks will almost certainly pass the first RBA cut on in full to their variable rate borrowers.
It is likely the RBA will use a conservative ‘wait and see’ approach but this may be the start of the cash rate’s downward cycle. It will be unlikely that we will have another interest rate cut at the next meeting on the 1st of April, but if inflation stays under control and the jobs market doesn’t become stronger, we might be in for another rate cut mid-year.
And most economists and banks agree there are more cuts on the way, three of the four major banks are predicting a minimum of four rate cuts this year with ANZ predicting there will be two interest rate cuts this year.
This also could mean the end of the sluggish property market in Melbourne with reports of increased numbers at open for inspections last weekend and even we have seen a spike in new buyer enquiry over the past 24-48 hours. It will take a good month or so to really see what the immediate effect will be on property prices (if any), but it’s nice to see some optimism in the back in the Melbourne property market again.
Kim Easterbrook – Managing Director
