November 07, 2023
At its November monetary policy meeting today, the Reserve Bank of Australia (RBA) raised the nation’s official cash rate by 25 basis points to 4.35%. This is the fifth increase this calendar year and the 13th rise in this tightening cycle since May 2022.
Speaking about the decision, Mortgage Choice CEO, Anthony Waldron, commented, “Australians will no doubt be disappointed with the Reserve Bank’s call, but Governor Bullock had made it clear over the last month that another cash rate rise was not off the cards. The latest economic data, which shows an increase in inflation over the September quarter and a fall in the unemployment rate, no doubt contributed to the RBA Board’s decision.”
The most recent Australian Bureau of Statistics Consumer Price Index (CPI) data revealed that inflation rose 1.2% in the September 2023 quarter, and 5.4% annually. ABS data also showed that in seasonally adjusted terms, in September 2023 the unemployment rate fell to 3.6%, and Australian retail turnover rose 0.9%, following rises in July and August.
Mortgage Choice home loan submission data showed a 3% uplift in refinancing activity during October, as borrowers continue to feel the pressure from increased rate rises, and seek out better deals on their home loans. The same data showed that 98% of loans submitted by Mortgage Choice brokers were for variable rate home loan products, and only 2% of loans had a fixed component.
The PropTrack Home Price Index revealed that national home prices set a record in October with the spring selling season in full swing. National prices climbed 0.36% month-on-month to peak levels, bringing them up 4.93% so far this year. All capital cities, except Darwin, saw prices rise in October.
Senior PropTrack Economist Eleanor Creagh said, “Record levels of net overseas migration, a challenged rental market, limited housing stock and a slowdown in the completion of new builds are offsetting the impacts of substantial rate rises and the slowing economy, with home prices continuing to lift.
“This additional increase in interest rates may slow the current pace of home price growth but is unlikely to deter these gains, with strong population growth, tight rental markets and a housing shortfall fuelling further price rises.”
Mr Waldron said, “As we approach the end of the year, I encourage all borrowers to get on the front foot with their home loan. Whether you’re approaching the end of your fixed-term, or you simply want to check if your loan is still the most competitive available to you, speak to your local Mortgage Choice broker today to find out what your options might be.”
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