Cash-strapped mortgage holders may receive an early Christmas gift this year, according to Finder’s latest poll.
In this month’s Finder RBA Cash Rate Survey, 36 experts and economists weighed in on future cash rate moves and other economic issues.
The majority of experts (81%, 29/36) believe the RBA will hold the cash rate at 4.35% in August, but more than one in four (26%) expect a rate cut by December.
“While inflation has been a stubborn thorn in the economy, the June quarter CPI data was in-line with expectations, although still higher than the RBA would like it to be,” said Graham Cooke (pictured above), head of consumer research at Finder.
“This doesn’t mean we will see a rate cut in August, but there is a chance we’ll get one by Christmas.”
Evgenia Dechter from the University of New South Wales said she isn’t anticipating any change to the cash rate this month.
“There is a slowdown in inflation and economic activity, and unemployment is creeping up,” Dechter said. “Although inflation remains persistently above the target, the RBA is likely to hold the cash rate.”
James Morley from The University of Sydney disagreed.
“The RBA will raise the cash rate because it will want to demonstrate its primary focus is on bringing inflation back down to the target range,” Morley said.
“A further weakening of economic conditions and improvements in inflation measures for Q3 will allow the RBA to consider reversing the rate rise in December and continue cutting in the new year to bring the cash rate back towards a neutral level.”
A record high of two in five mortgage holders are struggling to pay their home loans.
According to Finder’s Consumer Sentiment Tracker, 41% of homeowners struggled to pay their mortgage in July, up from 34% in June.
“The number of Australians who are struggling to afford their monthly mortgage repayments has been steadily trending upwards since 2021,” Cooke said. “Millions of homeowners are desperate for relief with borrowers anxiously waiting for rates to start dropping.”
Finder’s Economic Sentiment Tracker gauges experts’ confidence in five key indicators over the upcoming six months: housing affordability, employment, wage growth, cost of living, and household debt.
Average positive economic sentiment has dropped to a record low of 7% in August, surpassing the previous low of 8% in March 2020. Household debt remains a significant concern, with 52% of experts expressing a negative outlook.
“Millions of Aussies feel like they’re going backwards financially with many in deficit,” Cooke said. “People’s ability to save is deteriorating as more of their paychecks are sucked up by mounting interest rates and inflation.”
Cooke encouraged Australians to look for ways to stretch their dollar further.
“Tough times often spur people into action with thousands giving their finances a shake down,” he said.
“Finder’s Financial Fitness Challenge is designed to help households fight back against the rising cost of living. Completing the challenge could potentially save the average renter $3,810 over a year, while the average homeowner could put a whopping $13,722 back in their pockets.”
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
