As highlighted in a study by Money.com.au, 56 per cent of home owners across the country are concerned about the outcome of the central bank’s cash rate call. Unveiling tomorrow, the Cup Day decision will determine the setting of interest rates among lenders.
“Households have been battling rising interest rates for the past few years, and many are now at the end of their tether. With high living costs adding further pressure, many families are just holding on, waiting for a rate cut to ease the financial strain,” said Money.com.au’s home loans expert, Mansour Soltani.
“With Christmas around the corner, many Australians are having to tighten their belts even further, and unfortunately, any hopes of a Christmas rate cut have been dashed.”
Younger home owners were more likely to feel the weight of the decision, with 62 per cent of Gen Z concerned. Following were Millennials (60 per cent), Gen X (54 per cent), and Baby Boomers (47 per cent).
Meanwhile, 19 per cent reported feeling ‘extreme stress’ over RBA cash rate decisions, while 21 per cent said they’re not concerned at all. Just 5 per cent said they don’t follow the RBA’s cash rate announcements.
On the flip side, as recently discussed by Broker Daily, inflation is back within the RBA’s target band of 2–3 per cent. Despite this, economists are convinced we won’t see a cash rate cut until February next year.
Money.com.au’s research and data expert, Peter Drennan, is in agreement with these economists, saying there is more progress needed before a rate cut is to be considered.
“The main reason headline inflation has fallen is due to temporary electricity rebates provided to households. These rebates reduce electricity bills, but without them, inflation is still at 3.5 per cent,” said Drennan.
“That’s what the RBA will be watching closely before considering any move to lower the cash rate and provide relief to mortgage holders.”
The Reserve Bank hasn’t upped the cash rate since this time last year when it increased to 4.35 per cent. With inflation seemingly on the drop, hitting 2.8 per cent, the lowest it’s been in four years, signs are hopeful for a decrease in the new year.
Related: Inflation is at RBA’s target: Should we expect a Cup Day rate drop?