Powered by MOMENTUM MEDIA
realestatebusiness logo

Breaking news and updates daily. Subscribe to our Newsletter!

Home of the REB Top 100 Agents
Breaking news and updates daily. Subscribe to our newsletter

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Where will the RBA cash rate be in 12 months' time?

By Staff Reporter
31 August 2010 | 1 minute read

This month, we asked industry experts...

WHERE DO YOU THINK THE RBA CASH RATE WILL BE IN 12 MONTHS' TIME?

SHANE OLIVER
AMP

Advertisement
Advertisement

I predict that the RBA cash rate will be 5.5 per cent this time next year, which is close to the top [that it can be expected to reach]. Currently, it is 4.5 per cent. While there are risks that a double dip in the global economy may occur between now and then, it is unlikely. Some people are concerned that the cash rate will end up back where it was in 2008 as a result of the RBA trying to keep a lid on rising house prices and inflation. However, I think that this also unlikely, as inflation is currently within the RBA target level.


LISA MONTGOMERY
Resi Mortgage Corporation

We are expecting a welcome period of stability for official interest rates over the next 12 months after a series of rate rises. This means that despite any further global or domestic upheaval on the financial front, we can still expect the cash rate to get up to around 5 to 5.5 per cent, and level off around that figure for at least the first six months of next year. Variable lending rates will continue to rise in line with that official cash rate in addition to the occasional out-of-cycle increase by some of the majors over the next year.


ALAN OSTER
NAB

Given the recent moderation in domestic growth and disturbed conditions in global financial markets, it is likely that the RBA will defer further increases in the cash rate until later in the year. Core inflation should test the upper bounds of the RBA target range during 2011, so we expect rate rises to begin again in late 2010 (say 25 points in both November and December) and to peak at around 5.5 per cent in mid-2011.


MATTHEW HASSAN
Westpac

We expect uncomfortably high inflation reads, solid growth and tightening labour market conditions to prompt further interest rate increases, with three 25 basis point moves taking the cash rate to 5 per cent by September 2011. This will lift variable mortgage rates from their current 7.4 per cent to 8.15 per cent - a level well above historical averages. Westpac also expects the RBA to increase interest rates by a further 0.75 per cent by the end of 2011 in response to uncomfortably high inflation reads.


JASON ANDERSON
BIS Shrapnel

BIS Shrapnel is forecasting a cash rate rise of 0.25 per cent towards the end of 2010, and then another rise in the middle of 2011. Interest rates will remain reasonable by historical standards, and will not substantially dampen demand for housing. Over the next six months investor demand is expected to rise further, which will support market turnover. With prices currently flattening, we expect demand from first home buyers will gradually recover in 2011.

 

Where will the RBA cash rate be in 12 months' time?
default
lawyersweekly logo
Listen to other installment of the Real Estate Business Podcast
Rankings
rankings
JUST RELEASED
May 09, 2022

REB Top 50 Women in Real Estate 2022

REB is thrilled to present the Top 50 Women in Real Estate 2022 ranking, which sets t ... LEARN MORE

rankings
JUST RELEASED
May 04, 2022

REB Top 100 Agents 2022

Now in its second decade, the REB Top 100 Agents 2022 rankings are the most revered s ... LEARN MORE

rankings
JUST RELEASED
May 02, 2022

REB Top 50 Agents NSW 2022

Even a pandemic has not put the brakes on the unstoppable property market in NSW, whi ... LEARN MORE

rankings
JUST RELEASED
April 27, 2022

REB Top 50 Agents VIC 2022

The COVID-19 crisis has not deterred the property market in Victoria, which has been ... LEARN MORE

rankings
JUST RELEASED
April 25, 2022

REB Top 50 Agents QLD 2022

As the property market continues to roar in Brisbane and Queensland, the REB Top 50 A ... LEARN MORE

Coming up

rankings rankings
Do you have an industry update?

top suburbs

12 month growth
Mirador
103.33%
Bawley Point
98.13%
Walla Walla
90.7%
Byron Bay
86.67%
Kiama Heights
85.93%
Greta
84.14%
Nulkaba
81%
South Hobart
78.78%
Diddillibah
76.25%
Lennox Head
73.98%
SEE AREA REPORTS ON SMART PROPERTY INVESTMENT WEBSITE
Subscribe to Newsletter

Ensure you never miss an issue of the Real Estate Business Bulletin.
Enter your email to receive the latest real estate advice and tools to help you sell.