"The central forecast is for CPI inflation to continue to decline and to be back within the 2-3% range in late 2025." Governor Lowe
Spring has arrived, bringing good news for investors and property owners who eagerly awaited the Reserve Bank of Australia's (RBA) decision on the cash rate. At its monthly board meeting, the RBA announced its intention to maintain the official cash rate at 4.10 per cent.
This decision aligns with the RBA's recent trend over the past two months however, there are speculations that Governor Lowe might “be able to exit quietly,” in the eyes of Canstar’s editor-at-large, Effie Zahos (REB, 2023). This latest move reinforces the notion that the economy is gradually moving away from the high inflation levels experienced earlier this year.
In the 12 months leading up to July, the Consumer Price Index (CPI) published by the Australian Bureau of Statistics (ABS) increased by 4.9 per cent. This marks a decrease from the 5.4 per cent rise observed in June. Nevertheless, it remains significantly lower than its recent peak of 8.4 per cent in December 2022.
“Inflation in Australia has passed its peak and the monthly CPI indicator for July showed a further decline” Mr Lowe stated in a post-meeting statement. "But inflation is still too high and will remain so for some time yet."
"The central forecast is for CPI inflation to continue to decline and to be back within the 2-3% range in late 2025."
Spring is widely recognized as one of the busiest times in the real estate sector. Despite the recent increase in borrowing rates, which has limited buyers' purchasing power, property values have continued to climb steadily since the beginning of the year. Remarkably, Australia's property market has shown resilience, with prices hitting unprecedented levels in certain cities despite challenging conditions.
According to REA's Audience Pulse, more and more optimistic homeowners are pointing to high buyer demand and decreased competition as reasons they see this as an excellent time to sell their properties. This growing confidence has led to increased activity in recent months, with more properties being listed for sale, as sellers aim to stay ahead of the anticipated rush during the spring season.
The RBA's choice to maintain the cash rate at its current level is expected to give a boost to the property market's momentum. This decision offers a sense of assurance regarding borrowing costs, and the active market conditions are motivating people to participate in property transactions.
If you are considering selling your home in the market get in touch with us today.