RBA Rates Announcement March 2024

The official cash rate of 4.35% remains unchanged after today’s Central Bank two-day board meeting on monetary policy wrapped up today. 

The RBA explained today that inflation continues to moderate, and this trend is in line with its most-current forecasts. 

‘The headline monthly CPI indicator was steady at 3.4 per cent over the year to January, with momentum easing over recent months, driven by moderating goods inflation,’ explained the RBA today. 

‘The Board expects that it will be some time yet before inflation is sustainably in the target range.’

In fact, the RBA stated today that its central forecasts are for inflation ‘to return to the target range of 2–3 per cent in 2025, and to the midpoint in 2026.’ 

A majority of analysts are tipping a rate cut in 2024. Those experts believe this cut will happen around August and September. Though other market experts forecast relief for home-loan mortgage holders won’t happen till 2025. 

The predictions of rate cuts this year are supported by economic indicators. For instance, unemployment is expected to rise to around 4.5% this year, up from 3.9% in the final quarter of 2023. Furthermore, recent GDP growth data indicates ongoing weaknesses in Australia’s economic performance. 

In fact, critics argue that the RBA’s series of rate hikes may have been excessive. Banking institutions like NAB, for instance, have reported significant losses from mortgage arrears in late 2023. 

On the housing front, there are indications of resilience in the housing market despite the economic challenges. Australian home values are experiencing modest increases, driven by the anticipation of interest rate drops. This activity is, in some cases, leading to an increase in home values across Australia.

It is also worth noting that last month, there were more changes to fixed-rate home loans than variable-rate loans. 

Data shows that 29 lenders reduced at least one of their fixed rates, while only four increased them. For variable rates, there were still more lenders raising rates than lowering them. This suggests that competition is heating up in the fixed-rate home loan market, with lenders offering more attractive rates to win borrowers. 

So it’s important to shop around for the best deal. With that in mind, if you are considering reviewing your current arrangements, reach out to Mortgage Broker Sydney. 

Our friendly brokers can meet you wherever is most convenient: your home, office or local cafe. 

In addition, we are here to provide guidance on various strategies such as uncovering lower rates, enhancing savings, consolidating debts, and alleviating the impact of rising household prices.

The RBA next meet on May 6–7.