Media Release | 6 February 2024
Commentary from The Agency's Managing Director and Group CEO Geoff Lucas on the RBA's February interest rate decision.
Today's decision by the RBA to hold rates steady at its first meeting for 2024 came largely as expected following better than expected inflation rate data for the December quarter. It’s important to note that last week’s inflation numbers were assisted by government subsidies for rent and electricity for low income earners and despite the encouraging trajectory, inflationary pressures, especially services inflation, do remain. Today’s interest rate decision will continue to support positive buyer demand in the short term but we must recognise the economic reality that interest rates are likely continue at this level for some time and anticipated interest rate cuts may not happen as soon as current speculation.
Today’s RBA announcement is the first under its new regime of six weekly intervals between meetings. The reduced frequency, coupled with expected reduced volatility in rate changes this year is likely reduce the hyper focus on interest rates of the past two years. Increasingly this year will be focused more on demand and supply as the key drivers of residential price movements.
We expect 2024 will see more buyer and seller confidence due to reduced rate volatility, and greater clarity on a lower range of residential price movements.