Inflation at Its Lowest at 4.3%: Impact on Mortgage Rates

Good news! Australian inflation has come down from its peak from 8.4% a year ago to 4.3% as reported by the Australian Bureau of Statistics. But it remains above the RBA’s inflation target of 2–3%. 

Despite these inflationary challenges, positive factors like strong population growth, private and public investments, and a substantial pipeline of projects are expected to bolster economic growth. 

Many households are grappling with financial pressures stemming from elevated inflation and mortgage interest rates. 

The Australian Financial Review survey indicates 31 out of 40 economists don’t expect the RBA to raise the cash rate in February. This is in contrast to a previous survey where 21 out of 42 economists predicted a rate rise in November, which did indeed occur.

If the RBA believes that inflation is likely to decrease as forecasted, there may be more good news in store, as the RBA may be less aggressive with interest rate increases and may decide to hold rates steady instead.

January 2024