Do you think that the cash rate will hold this month?
Well, according to the latest Finder RBA Cash Rate Survey, more than 4 in 5 experts (82%,) believe the RBA will hold the cash rate at 4.35% in December, leaving 18% predicting an increase.
The survey had 38 experts and economists weighing in on future cash rate moves and other issues relating to the state of the economy.
Graham Cooke, head of consumer research at Finder, said a cash rate hold will be welcome news to cash-strapped mortgage holders.
He further said:
“The RBA was threatening to pull the presents from under the Christmas tree for many homeowners, but falling inflation means they can breathe a quiet sigh of relief.
Inflation is the one number the RBA is most heavily influenced by, so this downward trend is great to see.
Aussies with a home loan can now look forward to two months of certainty, as the RBA does not make a decision in January – and can only make 8 cash rate changes next year."
From 2024, the RBA will meet 8 times a year, rather than 11 times as is currently the case.
Evgenia Dechter from UNSW said declining inflation pointed to a hold this month:
“Other domestic and global indicators also project a slowdown in the Australian economy.
However, immigration inflow remains high, creating an upward pressure on prices in the short run."
According to Finder’s Consumer Sentiment Tracker, more than 1 in 3 (37%) Australian homeowners said they struggled to pay their mortgage in November.
Most experts now predict that the cash rate has peaked
According to Finder's survey, the majority of panellists (54%) now say the cash rate has peaked at 4.35%.
However, nearly half (46%) say another rate rise is yet to come.
Cooke said despite an expected rate hold in December, homeowners aren’t out of the woods:
“If inflation doesn’t continue to ease, we are looking at another rate rise early next year."
2024 to see fewer first-home buyers
The survey highlighted that a slim majority of the panel who weighed in* (54%) believe that the number of first home buyer loans will fall in 2024.
According to Finder’s Consumer Sentiment Tracker, more than 1 in 3 (36%) Aussies don’t think they’ll ever be able to afford their own home.
A further 18% say they aren’t interested in home ownership.
These figures have jumped from 2022 when 33% didn’t think they could afford a home and just 13% said they weren’t interested in home ownership.
When do you think you’ll own your own home?
| 2022 | 2023 | |
| Never, I don't think i’ll ever be able to afford it | 33% | 36% |
| Within the next 12 months | 5% | 2% |
| In 1-5 years | 17% | 17% |
| In 6-10 years | 17% | 14% |
| In 11-15 years | 7% | 6% |
| In 16-20 years | 5% | 3% |
| 20+ years | 3% | 4% |
| Never, I'm not interested | 13% | 18% |
Shane Oliver from AMP said government assistance programs (including the Help to Buy Scheme) would likely drive an increase in first home buyer loans.
Stella Huangfu from the University of Sydney said it was hard to tell:
“On the one hand, rising housing prices suggest worsening affordability.
That leads to a decrease in the number of first home buyer loans.
On the other hand, the unprecedented large number of migrants provides strong support in the housing market.
The intensified demand implies that we should see the number of first home buyers increase in 2024."
However Dale Gillham from Wealth Within said high interest rates are a deterrent:
“This along with increasing housing prices will slow new home buyers."
Christmas on credit
Many Australians could be starting the new year with a debt hangover, according to experts.
Over half of panellists (58%) expect more Christmas spending to be put on credit cards this year compared to previous years.
According to Finder's research, the average Aussie is tipped to spend $1,479 this festive season on presents, food, alcohol, eating out and travel.
The data also shows more than 1 in 10 (11%) people will put this spending on their credit card, while 7% will use Buy Now Pay Later (BNPL).
Further, Finder analysis of Reserve Bank of Australia data found the value of purchases made with credit cards reached an all-time high of $34.7 billion in September 2023.
