Advertisement
Australia markets closed
  • ALL ORDS

    8,050.20
    -23.90 (-0.30%)
     
  • ASX 200

    7,788.10
    -25.50 (-0.33%)
     
  • AUD/USD

    0.6467
    -0.0073 (-1.11%)
     
  • OIL

    85.45
    +0.43 (+0.51%)
     
  • GOLD

    2,360.20
    -12.50 (-0.53%)
     
  • Bitcoin AUD

    103,611.21
    -5,480.81 (-5.02%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • AUD/EUR

    0.6073
    -0.0017 (-0.29%)
     
  • AUD/NZD

    1.0885
    -0.0012 (-0.11%)
     
  • NZX 50

    11,931.32
    -2.99 (-0.03%)
     
  • NASDAQ

    18,003.49
    -304.50 (-1.66%)
     
  • FTSE

    7,995.58
    +71.78 (+0.91%)
     
  • Dow Jones

    37,983.24
    -475.84 (-1.24%)
     
  • DAX

    17,930.32
    -24.16 (-0.13%)
     
  • Hang Seng

    16,721.69
    -373.34 (-2.18%)
     
  • NIKKEI 225

    39,523.55
    +80.92 (+0.21%)
     

Economists tip RBA interest rate cuts in 2024 - here’s when

One in three experts are forecasting a cash rate cut by August.

There’s good news on the horizon for mortgage holders, with some experts forecasting the Reserve Bank (RBA) will start cutting interest rates by August.

Almost all of the 17 experts surveyed for Finder’s RBA Cash Rate Survey this month believed the central bank would hold the cash rate steady at 4.35 per cent in February.

It follows lower-than-expected inflation figures last week, with annual inflation dropping to 4.3 per cent in November, down from 4.9 per cent in October and an 8.4 per cent peak in December 2022. The December inflation data is set to be released on January 31.

RBA governor Michele Bullock and property
The RBA could cut interest rates by August this year, some experts say. (Source: AAP/Getty)

Are you a mortgage holder struggling with higher interest rates? Contact tamika.seeto@yahooinc.com

Finder head of consumer research Graham Cooke said many homeowners were in need of urgent reprieve.

ADVERTISEMENT

“Homeowners are still reeling from 13 rate hikes in the last two years,” Cooke said. “Our data shows a staggering 40 per cent struggled to pay their mortgage in December.”

Interest rates have soared from a record low of 0.10 per cent to 4.35 per cent since May 2022, adding $1,349 more per month to a $600,000 mortgage.

RELATED

When will interest rates go down?

One in three experts surveyed by Finder believed the RBA would cut interest rates by at least August this year. However, a bigger majority (40 per cent) didn’t expect the RBA would start cutting rates until December 2024 or later.

AMP chief economist Shane Oliver is expecting the RBA will start lowering interest rates in June. Oliver is forecasting three interest rate cuts in 2024, bringing the cash rate down to 3.6 per cent by the end of the year.

"We expect a combination of falling December inflation data, weak December retail sales and a rising trend in unemployment to head off another rate hike in February,” Oliver said.

“By June, enough evidence of weak growth and falling inflation will have accumulated to enable the RBA to start cutting rates."

CBA chief economist Stephen Halmarick is expecting the RBA will start cutting rates in September, with three interest rate cuts expected in 2024 and another three in 2025.

“Rate cuts to start in Sept 2024 as inflation forecasts are consistent with inflation in target,” Halmarick said.

Moody’s Analytics economist, Harry Murphy Cruise, expects the RBA will start cutting interest rates in the second half of next year.

"While the RBA has broken the back of price pressures, inflation is still a mile away from the central bank’s 2.5 per cent target. What's more, service inflation is proving sticky, meaning future improvement might be slow going,” Murphy Cruise said.

“That'll see interest rates stay elevated a while longer, with households and businesses having to wait until the second half of next year until the RBA eases up."

Finder’s Cost Of Living Pressure Gauge found Aussie households were currently sitting in the “extreme” pressure range at 79 per cent - an increase of 1 per cent from the month before.

The RBA is set to hand down its next interest rate decision on February 6.

Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to our free daily newsletter.

Yahoo Australia