the Reserve Bank of Australia (RBA) announced 25 additional basis points to the cash rate target—placing it at an 11-year high of 3.6 percent. This is in stark contrast to the 0.1 percent cash rate target of 12 months ago. Following the RBA governor’s tip that a pause in interest rate rises is closer, as well as hints of positivity surrounding inflation, pundits are speculating about when borrowers can once again look forward to rate cuts.
Last week, Canstar shared the cash rate outlook from the big four banks. For borrowers, the more optimistic forecast came from Commonwealth Bank (CBA), which expects only an additional 25 basis points by mid-year, followed by a Q3 drop of 50 basis points and more cuts in 2024. The less optimistic forecast comes from ANZ, which expects the cash rate to peak at 4.1 percent in May, and a first rate cut by November 2024. Either way, it begs the question of what impact these interest rate scenarios could have on the housing market.