The RBA holds the cash rate at 4.1 per cent in September and economists believe interest rates could come down from early 2024.
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00:00 The RBA has decided to hold the cash rate again for the third month in a row at 4.1%.
00:05 So Adrian, what was the decision behind that call?
00:09 Okay, so there were a few factors that factored in that decision. One was that
00:14 inflation is coming down. The latest month we figured had it going down, growing at 4.9%,
00:22 which is a long way from where it was at the end of last year when it was above 7%.
00:27 Human spending has gone down very significantly and the Reserve Bank seems to feel more confident
00:37 that inflation is on the path to coming back within its 3% target band, which it wants to
00:45 get there by the middle of 2025. Brittany, what will this decision mean for Homebuyers?
00:51 Well Adrian, I think Homebuyers are still really feeling the pressure of the previous interest rate
00:55 rises. Recent data from Roy Morgan suggested that 1.5 million Australians are now at risk of mortgage
01:02 stress and that's a level we haven't seen since 2008 in the global financial crisis. So the other
01:08 thing that we're seeing is that Homeowners are looking for a better deal. So the latest ABS
01:13 lending indicators showed that the value of refinancing had hit a record level as well in
01:18 July and that was $21.5 billion worth of refinancing. So Homeowners are stressed, they're looking for
01:26 better deals and I guess we'll have to see what happens for the rest of the year.
01:31 Yeah, well on that, it looks like there's a lot of speculation about whether this is a peak of
01:37 interest rates or whether the RBA might move again, either another rate rise or maybe even a rate cut
01:45 in the future. At this stage the money is on the rates staying where they are for quite some period
01:51 of time until at least early next year. There is an outside chance of one more rate hike but
01:58 a lot of economists think that is highly unlikely at this stage. The more likely scenario is extended
02:07 rate pause and people thinking about rates coming down from early to the middle of next year.
02:15 So possibly some good news for Homeowners ahead of Christmas with just a few more months to go.
02:20 Possibly. Fingers crossed.
02:22 Yeah.
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