Interest rates dropped
The Reserve Bank delivered a 25 basis points interest rate cut today, as widely expected, to a cash rate target of 3.85 per cent, noting that inflation is now back in the target band.
And there are downside risks ahead, given global and domestic uncertainties, to the extent that today's Board Meeting tossed up a 50 basis points cut as an alternative course of action.
The major banks were quick to announce that the interest rate cut will be passed on in full to mortgage rates.
Moves in bond yields - 3-year bond yield fell quite sharply by 18 basis points - and the Aussie dollar suggested that perhaps markets were expecting a slightly more hawkish rhetoric.
Forecasts out until June 2027 show only a modest increase in the unemployment rate to 4.3 per cent, with core inflation expected to hold steady at around 2.6 per cent throughout the forecast period.
Headline inflation could temporarily poke its head out above the top of the target range as energy and cost of living subsidies are unwound.
GDP growth is expected to pick up only modestly through to June 2027, especially after accounting for population growth.
Source: Reserve Bank of Australia
Market pricing points towards a cash rate target of around 3¼ per cent by the end of the year, suggesting perhaps two or more further interest rate cuts over the remainder of 2025.
Hopefully today's move and signalling will provide developers in the property market with some much-needed confidence to proceed with new housing projects, as construction has been well behind the curve for some time now.
1. Download our property buying guide
Download our free property buying guide here.
You can also check out a few of our recent property purchases here.
Get in contact with us today if strategic property investment is your thing.
2. Subscribe to our Top 10 Podcasts for Investors
Listen in to our podcasts
The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with well over 50,000 audio downloads per month, and growing fast.
And our popular Low Rates High Returns Show also remains available on Spotify.
3. Subscribe for my free daily blog
Subscribe for my free daily blog with some 3¾ million hits here.
You can also catch up with me daily on Twitter here, where I'm active daily and have over 15,000 followers.
By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here.
My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - follow our book release on Facebook here and at our Buy Right podcast series here.
4. Work with me privately
For a limited time you can book in a free diagnosis call with me here, so book in a call today.
