Sydney, Nov 5: The Reserve Bank of Australia (RBA) has left the cash rate unchanged at 4.35 per cent for November, in line with predictions from all 38 experts surveyed in this month’s Finder RBA Cash Rate Survey™.
This decision comes as Australians contend with high financial stress, with recent data indicating that 81 per cent, or approximately 16.9 million people, reported financial stress in October.
Graham Cooke, head of consumer research at Finder, noted the likelihood of a rate cut in early 2025, stating, “Even though inflation has hit the RBA’s target window of 2-3 per cent, this doesn’t trigger the RBA to automatically start cutting rates – which will disappoint homeowners.”
Cooke added that nearly half (47 per cent) of borrowers are struggling with repayments, leading many to hope for multiple rate cuts in the coming year.
As Australia prepares for the busy Melbourne Cup season, Finder’s Consumer Sentiment Tracker indicates financial pressure remains high.
Notably, 28 per cent of surveyed experts suggest the current cost-of-living crisis is exaggerated, citing historical context and the resilience of middle-income earners.
Mark Crosby of Monash University argued, “For those in the lowest quintile of the income distribution these cost increases should be addressed, but for middle-income earners, we are still a wealthy country.”
Homeownership remains elusive for many, especially younger Australians, with Finder reporting that 20 per cent of millennial and Gen Z Aussies don’t believe they will ever afford their own home – a notable increase from 11 per cent in 2021.
Despite this trend, Graham Cooke advised potential buyers to consider various schemes and look for ways to save.
“Make sure you look at the schemes, grants and incentives that can help you buy a home,” he recommended.
Meanwhile, one-third of panellists (32 per cent) advocate for reducing the minimum serviceability buffer to improve borrowing capacity, while 28 per cent support removing student debt from borrowing capacity calculations.
However, a majority (60 per cent) remain opposed, with University of Sydney’s Stella Huangfu warning that increased borrowing power could drive up demand and push house prices higher, ultimately offering little benefit for first-home buyers.
The government’s ‘Help-to-Buy’ scheme, aimed at increasing housing affordability, received little support from experts, with 86 per cent doubting its efficacy.
As inflation shows signs of easing and the RBA keeps rates on hold, attention now turns to early 2025, when many experts predict rate cuts may finally offer financial relief to Australians feeling the economic strain.
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