The Reserve Bank of Australia’s (RBA) decision to keep the cash rate on hold at 4.35% at its September meeting brings welcome news for Brisbane’s property market. As inflation continues its steady decline, the hold decision offers stability, encouraging both current homeowners and potential buyers. Insights from Tim Lawless, Executive Research Director for CoreLogic Asia-Pacific, further highlight why this decision is a positive outcome for Brisbane property owners and investors.
Australia’s Softer Approach Supports Stability
Unlike many Western nations, Australia has taken a less aggressive approach to monetary policy. Countries like the US, UK, and New Zealand have raised rates by over 500 basis points, but Australia has increased its cash rate by a more moderate 425 basis points. This careful approach is good news for Brisbane, where property owners and investors are more immediately affected by cash rate changes due to a high proportion of variable-rate mortgages.
Because about 70% of Australian mortgages are on variable rates, changes in interest rates flow through quickly to household budgets. This makes the RBA’s decision to pause rate hikes particularly important, as it allows Brisbane residents to maintain a more balanced financial position, providing stability in the property market.
Easing Inflation: A Win for Buyers and Owners
Australia’s inflation rate has been declining steadily, now sitting at 3.8% in the June quarter of 2024, down from 7.8% in late 2022. While inflation in other countries may have fallen faster, the RBA has chosen to prioritise a gradual reduction in inflation to avoid shocks to the economy. This deliberate approach ensures that the property market remains resilient without risking a downturn due to overly aggressive rate hikes.
For Brisbane buyers, this is particularly good news. Easing inflation translates into less pressure on household budgets, potentially freeing up more buyers to enter the market. Meanwhile, existing property owners can breathe easier, knowing that rising costs are beginning to slow, making it easier to manage mortgages and other expenses.
Consumer Confidence and Future Prospects
The RBA’s decision to hold rates also boosts consumer sentiment, which is key to driving property transactions. Many Brisbane households are now seeing this as a signal that the rate hike cycle may be coming to an end, with the next move likely being a rate cut. As a result, both buyers and sellers are regaining confidence in the property market, which should translate into more activity in the months to come.
The potential for future rate cuts will be a game-changer for the Brisbane market. Buyers who have been waiting for better borrowing conditions could soon find themselves in a more favourable position. With rates on hold, now may be the ideal time for prospective buyers to explore their options before competition intensifies once rates start to decline.
Now is the Time to Act
The RBA’s decision to hold interest rates is a positive signal for Brisbane’s property market, offering stability and building consumer confidence. As inflation eases and the likelihood of future rate cuts increases, both buyers and sellers can expect improved conditions in the months ahead.
If you’re looking to buy, sell, or invest in Brisbane’s dynamic market, now is the perfect time to act. Contact our expert team today to explore your options and make the most of this promising opportunity.
