September 05, 2023
At its September 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 commented, “Today’s cash rate call marks Governor Lowe’s final monetary policy meeting as Govenor of the RBA. The ‘hold’ decision will be welcomed by borrowers, as well as those hoping to buy a property this Spring selling season.
“This is the third month with no change to the cash rate, following new economic data from the Australian Bureau of Statistics that shows a rapid slowing of inflation and a reduction in consumer spending.”
Data from the Australian Bureau of Statistics (ABS) showed the monthly Consumer Price Index (CPI) indicator rose 4.9% in the 12 months to July 2023, down from 5.4% in June and a significant reduction from the CPI peak of 8.4% in December 2022.
According to the ABS, in July 2023 the unemployment rate increased to 3.7% in seasonally adjusted terms. And the ABS’s Monthly Household Spending Indicator released in early September revealed that households have curbed their spending over the past 12 months amid higher interest rates and inflation.
Mortgage Choice home loan submission data for August showed a significant jump in the proportion of borrowers choosing variable rate loans, with 97% of borrowers opting for variable rates, and only 3% choosing to fix part or all of their home loan. Mortgage Choice also saw a steady demand for refinancing as borrowers continue to roll off low fixed rate loans, with 38% of loans submitted during August for refinances.
The PropTrack Home Price Index revealed that national home prices rose for the eighth consecutive month in August, jumping a further 0.28%. National prices are now 2.64% higher than a year ago and up 3.51% so far this year. Sydney continues to lead Australia’s home price recovery, with prices increasing a further 0.47% in August. Sydney prices are now up 6.19% from their trough in November 2022 and are just 1.29% below their peak recorded in February 2022.
Senior PropTrack Economist, Eleanor Creagh said, “The decision by the Reserve Bank to continue holding the cash rate steady in September is likely to maintain both buyer and seller confidence as the spring selling season begins, with home prices likely to continue lifting in the period ahead.”
Mr Waldron said, “In the nation’s biggest capitals, demand continues to outstrip supply, and buyers will need to move quickly once they find the property they want to buy. This makes it even more important to have your finances in order – a mortgage broker can ensure you’re ready to make an offer with confidence.”
