Most Australian homeowners expect the Reserve Bank of Australia (RBA) to leave the official cash rate unchanged for a third consecutive month.
According to a new survey by Loan Market Group, 53 per cent of the 397 respondents said they expect the RBA to maintain the current cash rate – leaving it at three per cent at its March board meeting.
Thirty-nine per cent of the homeowners surveyed predicted the RBA will lower the cash rate by 25 basis points on Tuesday.
“The RBA has released some firm statements in the past several weeks that indicate the cash rate will be held constant in the short term and used in reaction to any economic indicators falling below targeted ranges,” Loan Market spokesperson Paul Smith said.
AMP’s chief economist, Shane Oliver, said last week that he expects more rate cuts to come this year.
Mr Smith said it appears homeowners are well aware of the state of the Australian economy and the subsequent likelihood of rate cuts. In a similar survey last month, 55 per cent of homeowners correctly predicted the RBA would leave rates unchanged.
“Consumer confidence has been varied for some time but these survey results indicate that homeowners are aware of the multitude of facts the RBA considers when it asseses the cash rate and the impact it can have on their home loans and deposited savings,” he said.
Mr Smith added that with many lenders continuing to reduce the interest rates on fixed products, there was still a strong anticipation of interest rates going down at some point in the next several months.