Rate Cuts Predicted
Homeowners are tipped to be almost $700 a month better off by the end of 2026 if predicted interest rate cuts come through.
BIS Oxford Economics predicts that the cash rate will drop by 1.75 percentage points within the next 18 months.
It says this will leave more money on the wallets of homeowners and also improve the borrowing capacity of those looking to get into the market. It predicts the first interest rate cut will come in December this year.
Under that scenario based on the $624,000 average Australian home loan, monthly repayments will drop from $4003 to $3310 or about $8300 per year.
“Interest rate cuts from late 2024 should boost credit availability, accelerating broad price growth once again,” senior economist, Maree Kilroy says.
She says higher borrowing costs in 2023 did not deter buyers.
“Underlying demand has been robust in many sectors, backed by the strongest population growth increment on record. Migration is running red hot but should soon normalise.”
