RBA UPDATE – SEPTEMBER 2023

RBA UPDATE                                   

SEPTEMBER 2023

RBA UPDATE | Effective September 6, 2023

The Reserve Bank of Australia (RBA) has announced their third consecutive official cash rate pause, holding steady at 4.10% for another month.

This marks Governor Phillip Lowe’s final rate decision, as his successor Michele Bullock steps into the role from 18/09/23.

CoreLogic Head of Research Eliza Owen stated that this economic slowdown may prompt the RBA to implement “a reduction in the cash rate in the second half of 2024.”

The Reserve Bank of Australia (RBA) has announced their third consecutive official cash rate pause, holding steady at 4.10% for another month.

This cash rate decision marks Governor Phillip Lowe’s final, as his seven-year tenure draws to a close. Mr Lowe’s successor Michele Bullock will step into the role from 18 September 2023, becoming the first female governor of the central bank.

CoreLogic estimated that 1.3 million home loans are expected to move from low fixed rates to high variable rates in 2023 and 2024, with the peak to hit in the second half of this year. Notably, CoreLogic Head of Research Eliza Owen stated that the “official data on mortgage stress” has not depicted any great surge in arrears despite many fixed-term loans expiring.

“The good news for mortgage holders is that this period of economic slowdown will also take the RBA closer to its long-term inflation target, which could be the impetus for a reduction in the cash rate in the second half of 2024, as predicted by most major banks,” Ms Owen said.

Contact your mortgage broker or finance professional to ensure your current loans is still suitable for your needs.

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