So, when will it stop?
September 2024, according to two of the big four banks, while the other two suggest later next year.
RateCity has published these forecasts from the banks:
- CBA: Next cut September 2024, cash rate falling to 2.85% by May 2025
- Westpac: Next cut in September 2024, cash rate falling to 2.85% by December 2025
- NAB: Next cut by November 2024, cash rate falling to 3.10% by February 2026
- ANZ: Next cut by December 2024, cash rate falling to 3.60% by June 2025
So how accurate are the forecasts? The banks have a vested interest in getting these numbers right. They set their fixed interest rate loans based on whether they think future interest rates will go up or down.
But rate rise forecasting is hard to get right. The Reserve Bank of Australia, which sets the official cash rate, notoriously forecast an extended period of historical low rates before jacking up rates each month as inflation unexpectedly took flight.
Most economists believe we’re near the peak of the rate rises, so borrowers may have some relief in sight. But pegging that longed-for rate drop to a specific date may be a bit too soon.
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