Borrowers struggling under rising rates can breathe a sigh of relief, with the RBA expected to keep interest rates on hold for the next few months.
AMP Capital Investors chief economist Shane Oliver told Real Estate Business that while he expects to see more upside in this cycle, the RBA will keep interest rates on hold until the full effect of the last few rate rises is felt.
“We have seen some softening in demand, which should force the RBA to pause rates momentarily. In addition, there is still a lot of turmoil in Europe, so I expect that to have a significant effect on the RBA’s decision,” Mr Oliver said.
“The RBA indicated last month that it had contemplated keeping interest rates on hold, so I think this sentiment will not only be carried over into this month, but also acted upon.”
The RBA has lifted the official cash rate six times in the past seven board meetings.
Mr Oliver said he was 95 per cent certain the RBA would not lift rates again in June.