July 04, 2023
At its July monetary policy meeting, the Reserve Bank of Australia left the nation’s official cash rate unchanged at 4.10%.
Speaking about the decision, Mortgage Choice CEO Anthony Waldron said, “Homeowners around Australia will be breathing a sigh of relief today following the Reserve Bank’s decision to keep the cash rate on hold after 12 cash rate increases since May 2022.
“We’ve seen borrowers rushing to get a better deal during June, before many lenders stopped their cashback offers at 30 June. Mortgage Choice home loan submission data shows the biggest spike in refinancing activity this year, with 52% of all loans submitted by Mortgage Choice brokers in June being refinance transactions.
“Mortgage Choice data reveals borrowers are again chasing certainty. During June, we saw a surge in demand for fixed rate products, with 14% of loans submitted by our brokers having a fixed portion, compared to just 7% in the month prior.”
The PropTrack Home Price Index shows Australian home prices jumped again in June, rising 0.3% month-on-month. National prices are now just 0.1% lower than they were a year ago. Across the capitals, prices are now higher than at the same time last year.
PropTrack Senior Economist, Paul Ryan said, “So far, the housing market has shown remarkable resilience to sharply higher interest rates. Despite rates now at levels not seen since 2012, home prices increased further in June, and are up 2.3% over 2023 so far. Forward indicators point to further home price growth in the months ahead. But continued higher interest rates remain a risk for the housing market. At some point, eroded borrowing capacities and weaker economic conditions brought about by higher interest rates may lead to price falls, as seen in 2022.”
Mr Waldron said, “It remains to be seen if the cash rate will now remain stable, but I encourage all borrowers to speak to their mortgage broker. The start of a new financial year is a great time to review your home loan and ensure you’re getting the best possible deal for your needs.”