Professionals Burleigh 
As we wrap up the year, the Reserve Bank of Australia (RBA) has announced its final cash rate decision for 2024, holding steady at 4.35%. This marks the 14th consecutive month without a rate change, leaving Australian borrowers to brace for a challenging holiday season.
Despite widespread speculation earlier in the year about a potential rate cut in 2024, persistent inflation and high living costs have prevented any relief before Christmas. Economists now predict rate cuts may not materialize until the second quarter of 2025.
RBA’s December Decision: What It Means
The RBA’s decision reflects the central bank’s ongoing battle to curb inflation, which remains above its target range of 2–3%. RBA Governor Michele Bullock emphasized that inflation must sustainably fall within this range before any rate cut is considered.
Key Takeaways:
- Core Inflation: Despite a drop in headline inflation to 2.8% in September, core inflation remains elevated at 3.5%.
- Economic Forecast: Major banks predict rate cuts will begin between February and May 2025, with cautious optimism for mid-year relief.
The Inflation Battle: A Long Road Ahead
The fight against inflation has been a dominant theme throughout 2024. While progress has been made, particularly with headline inflation falling from a peak of 7.8% in late 2022, underlying pressures persist. Components such as energy prices and housing costs continue to challenge the RBA’s efforts to stabilize the economy.
Governor Bullock noted that inflation’s impact has permanently increased price levels, adding pressure on Australian households already grappling with higher mortgage repayments.
Housing Market and Home Financing Trends
The prolonged high-interest rate environment has affected Australia’s housing market and refinancing activity, with several key trends emerging:
- Refinancing Uptick: As borrowers seek relief from cost-of-living pressures, refinancing activity increased by 3% in November—the largest month-on-month jump in 2024, according to Mortgage Choice data.
- Property Prices Slow: The PropTrack Home Price Index showed national home values rose by just 0.15% in November, with affordability constraints and rising stock levels contributing to the slowdown.
- Record Median Home Values: The national median home value reached $800,000 in November, a new peak after 23 months of consecutive growth.
Experts anticipate that once rate cuts begin, affordability and buyer confidence will drive renewed demand, leading to an acceleration in price growth during the latter half of 2025.
Looking Ahead: What Borrowers Can Expect in 2025
While rate cuts remain uncertain in the near term, borrowers can take proactive steps to position themselves for financial success:
- Refinance Smartly: With refinancing activity gaining traction, now is the time to explore better home loan rates and terms.
- Prepare for Future Opportunities: Work with a trusted mortgage broker to develop a strategy that aligns with your financial goals for 2025.
- Monitor Economic Indicators: Inflation data and RBA decisions in the coming months will shape the housing market.
The RBA’s next cash rate decision will be announced in February 2025, following updates to inflation and labor market statistics in January. This decision will also mark the beginning of the RBA’s new split board structure, which separates monetary policy and governance functions.
Insights from Professionals Collective
At Professionals Collective, we understand how challenging the current economic climate can be for borrowers and homeowners. Whether you’re navigating rising interest rates, planning to buy, or considering refinancing, our team is here to guide you through every step of your property journey.
📞 Contact us today on 0756 692 490 or 0400 167 594 to discuss how we can help you achieve your real estate goals in 2025. Together, we’ll turn challenges into opportunities.
