The Reserve Bank of Australia is widely expected to cut interest rates, potentially lowering them to 4.1% by the end of the year. Sydney Auction clearance rate at 66%.

Week’s Key Focus

The Reserve Bank of Australia’s (RBA) current official cash rate stands at 4.35%, the highest level in nearly 12 years. Since May 2022, the RBA has raised rates 13 times in response to rising inflation. However, recent surveys indicate that about 90% of economists believe the RBA is unlikely to continue raising rates and may even cut rates to 4.1% by the end of this year or early next year. While inflation has eased, it has done so more slowly than expected, leading economists to predict a higher likelihood of a rate cut. However, if inflation remains elevated, the RBA may still consider further rate hikes.

Meanwhile, some countries in Canada and Europe have already entered a new phase of monetary easing, which has heightened market expectations for an RBA rate cut.

RBA Governor Michele Bullock expressed optimism about the Australian economy, despite the global economic slowdown, and does not anticipate a recession. This view is echoed by many market analysts, who generally believe that Australia may further ease monetary policy before 2025.

Overall, despite the dual challenges of inflation and economic growth, the RBA will need to remain flexible in its future monetary policy decisions to navigate an uncertain economic environment.

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Auction Results Last Week

Sydney: 596 properties were auctioned, with results reported for 384; 254 were sold. The clearance rate was 66%, with total auction value of AUD 297,541,735 and a median house price of AUD1,441,250.
Melbourne: 791 properties went to auction, with results reported for 529; 339 were sold. The clearance rate was 63%, with total auction value of AUD 293,174,626 and a median house price of AUD 1,000,000.