For those who are wondering what the future holds, there is a clear indication to be found in the financial markets. These markets clearly show what the experts believe will happen, and since the RBA announcement, the financial traders have fully priced in the first cut to rates by August with another expected before the end of 2024.

Some people have been forecasting an earlier rate cut than this, but it is important to keep in mind that the Reserve Bank has not completely ruled out a further increase in interest rates before it starts reducing them. While this is looking increasingly unlikely, it does reflect the conservative approach that the RBA is taking.

From the perspective of homebuyers and sellers in the northern corridor of Melbourne, it’s worth remembering that a reduction in interest rates will have two impacts on our local property market. Firstly, any cut to rates will boost overall confidence while enabling buyers to potentially service their home loan with greater ease. The secondary impact will be that once interest rates start coming down, APRA may well reduce their “serviceability buffer” which requires Banks to assess your ability to repay your loan at a rate 3% higher than you are actually being charged. Again, this will increase the borrowing capacity of home buyers.

As I have mentioned in previous posts, smart buyers and sellers will make their move before interest rates actually move, as this will enable them to make choices without an increased level of competition.

So if you would like to discuss your options, and the best ways to maximise your own results in this dynamic market environment, feel free to give us a call this week at Barry Plant Thomastown on 9466 3233.

Best wishes,
Con Constantinou
Barry Plant Thomastown