Good News For Those With A Home Loan: Rates Could Be Headed Lower!

Interesting news through on Business Insider during the week, talking about the potential for the next move for the RBA to be down!

For some time the Reserve Bank of Australia (RBA) has said the next move in official interest rates is likely to be higher.

While the vast majority of those in markets still share this view, the tide is slowly turning.

Many economists who were calling for rate hikes next year have now pushed back their call for policy tightening into 2020, or beyond.

And today Shane Oliver, Chief Economist at AMP Capital, has broken ranks with the prevailing market view, suggesting the next move in the RBA cash rate won’t be higher, but lower, with the risk of more than just one cut being delivered.

“Given the combination of falling house prices, tightening credit conditions and constrained growth, which will keep wages growth weak and inflation below target, we are changing our view on the RBA from being one of rates on hold out to second half of 2020 to now seeing the next move being a rate cut,” Oliver said following the release of Australia’s national accounts.

“We still see rates on hold through 2020, but can’t rule out a rate cut if weak data continues next year, especially inflation and wages.”

Common sense facts coming through now, coupled with the lack of construction over the past 12-8 months while our demand for property is going high, means that Kevin Young’s prediction of another mini property boom in 2020 are coming closer to fruition!

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Have a great weekend and catch you next week!

Warm Regards,

Troy