The cash rate announcement on Tuesday is expected to be another hold by many experts, but there’s a chance there could be multiple moves to an all-time low by December.
According to comparison website Finder’s panel of experts, all 31 experts on board expect to see the cash rate to hold at 1.5 per cent.
However, those who thought a rise is on the cards this year are declining, with the number dropping to 25 per cent, down from last month’s 40 per cent, which Finder’s insights manager Graham Cooke said was previously “the most dramatic thing I have seen in four years of running this survey”.
“This month, that drama is elevated with just one in four believing this to be the case,” he said.
“With the housing market continuing to tumble, and other global and international economic factors looking grim, experts seem to be sure we’re looking at at least one cut in 2019, if not two.”
A cash rate decline is proving to be more likely, with 75 per cent of experts seeing a cut as the RBA’s next movement, and 15 out of 17 polled experts believe at least one cut will occur this year.
Further, 9 out of 17 polled experts also believe the cash rate will reach a new record-low of 1 per cent before the end of the year.
Mr Cooke said the second half of the year is more likely to experience rate cuts, with the most popular months being August and November.
For Dr Andrew Wilson, chief economist at My Housing Market, the easing of the current cash rate has been expected for a while.
“Although recent wage data was reasonable – not good, not bad – RBA has conditioned the market to now expect a long-needed cut,” Dr Wilson said.
“This cut will attempt to revive consumption, which is now likely to also be impacted by continuing weaker housing markets.”
The rate cut predictions, coupled with Finder data indicating housing affordability sentiment reaching record highs and employment and wage growth sentiment reaching record lows, mean good news for property investors looking to buy.
“In what is overwhelmingly a buyer’s market, investors may be able to bag a bargain in the current climate. However, as always, they should look for value, and not just price, before they sign on the dotted line,” Mr Cooke said to Smart Property Investment.
“Investors with a deposit saved are in the best spot to make a move, as prices have dropped and rates are at all-time lows, with a chance a going lower still.
“Despite historically low rates in market, buyers should factor in a buffer of 2–3 per cent on top of the home loan interest rate offered to accommodate for future rate hikes.”
Despite the market being skewed in the favour of buyers, Mr Cooke said it is not all bad news for property sellers.
“Whilst it is a buyer’s market, a rate cut or two is potentially good news, as lower rates can mean a larger field of buyers and less days on market,” he said.