June 06, 2023
At its June monetary policy meeting, the Reserve Bank of Australia raised the nation’s official cash rate by 25 basis points to 4.10%.
Speaking about the decision, Mortgage Choice CEO Anthony Waldron said, “The Reserve Bank’s decision to raise the cash rate shows that it believes more needs to be done to stop inflation.”
“Most borrowers have been happy to keep their rates variable throughout the year, and this continued in May. Mortgage Choice home loan application data shows that over the month, 93% of borrowers chose variable rate home loan products, compared to just 7% who fixed their rate.”
The PropTrack Home Price Index revealed that nationally, home prices increased in May, rising 0.33% as the home price rebound gathered pace. This brings prices up 1.55% from the low point recorded in December 2022. Home prices in the combined capital cities have risen 1.34% in the past three months, the strongest quarterly growth since the December quarter of 2021.
PropTrack Senior Economist, Eleanor Creagh, said “The pace of price rises may slow with interest rates lifting further, particularly if the flow of new listings increases. However, the factors precipitating stronger housing demand – population growth and tight rental markets – remain alongside an undersupply of new homes. This may see home prices to continue to lift in the months ahead.”
“We may be approaching the end of the current rate rise cycle following 12 interest rate rises since May 2022,” said Mr Waldron. “As we enter the second half of 2023, thousands of borrowers will roll off the end of their fixed rate terms and I encourage these borrowers to speak to their broker to understand what their new repayments will look like and whether they might be better off switching loans or lenders to access a better deal.”
