- November 28th, 2024
Why the RBA Is Likely To Hold Steady on Rates (For Now) and What It Means for Property Investors
Understanding the latest inflation figures and how they shape interest rate decisions—and property market opportunities.
read moreAs expected, today the Reserve Bank of Australia has held the cash rate at 4.35%. They have maintained this rate since November 2023 when the last change increased it from 4.10 to 4.35%. (rba.gov.au). Whilst there is little shock to today's outcome, could the 12-month mark and the RBA's next meeting in November 2024 see our first welcome change since April 2022 when the cash rate was lifted from 0.10% to 0.35%?
Although previous shorter-term data had inflation trending downward, CPI rose 1% from the March to June quarter, and in the 12 months from June 2023 to June 2024 (accounting for seasonal adjustments), inflation increased to 3.8% (abs.gov.au). The current figures highlight that the RBA's mission to bring inflation back into its 2-3% target range may still take some time.
What Does This Mean for Investors?
The housing sector not only remains resilient, but continues to prosper with 1.1% growth in the last quarter alone, combined with the rental market remaining tight as the growth in this sector still exceeding 7% over the past 12 months.
For investors, this means that no matter which part of the peak or trough we find ourselves in through out the economic lifecycle entering the property market will never be a bad decision.
The barriers to entry caused by higher cash rates and reduced borrowing capacity will very soon become a thing of the past, when that happens will depend on you who ask but if you'd asked the RBA 12 months ago they didn't forecast the inflation range reaching below 4% until well into 2025.
Relief appears to be on the horizon for investors and borrowing capacities, however with that will come the surge in housing prices as the market becomes more competitive with more players entering the arena of property investment.
Why Now Is the Time to Act
For savvy investors, this makes now an ideal time to secure properties before prices escalate, allowing you to capitalise on future growth and demand while building long-term wealth through strategic investment.
Given that the general consensus is for rates to drop in 2025, the winners will be those that are willing to get into the market and secure property at today’s prices. That slightly higher interest rate today, will fast wash away when rates drop and those that have been sitting on the sidelines come back into the market in droves and further increase prices throughout 2025.
Beat the Rush: Build Your Property Portfolio Now
The question is, will you wait for rates to drop or make a move now and beat the rush? Securing property today not only allows you to capitalise on lower current prices, but also to build long-term wealth as the market grows more competitive.
If you’re ready to get ahead of the curve and want to explore your next property investment opportunity, book a call with a mentor at The Property Mentors today. Our experienced team can help you strategise and make smart investment decisions that position you for long-term success.
