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As Australian home owners prepare for the Reserve Bank of Australia’s (RBA) inaugural 2023 cash rate decision, one industry heavyweight has called for the central bank to place consecutive increases on the backburner.
Raine & Horne executive chairman Angus Raine has implored the RBA to halt successive rate increases until the financial implications of last year’s eight rises are completely understood.
He cited the Australian Bureau of Statistics’ (ABS) most recent consumer price index data, released earlier this month and covering November 2022, which revealed the monthly indicator had risen 7.3 per cent in the previous 12 months, a result that lies below both the federal budget and RBA’s 7.75 per cent and 8 per cent forecasts.
“It’s imperative that the RBA holds off on adding consecutive hikes until the full brunt of the continuous hikes since May 2022 has had on consumer confidence, and inflation is understood,” he said.
With last year’s cash rate increases having “no doubt achieved their intended impacts”, Mr Raine stated, “Australian mortgage holders and prospective buyers — particularly first home buyers — need a break from the constant rate increases”.
He added that signs of positivity have begun rearing their head, with certain Raine and & Horne outfits in the Northern Beaches reporting a spike in listings and the number of groups at open for inspections.
“We just need the RBA to do its bit and take the foot off the monetary policy pedals to give vendors and buyers a break,” Mr Raine said.
Mr Raine’s sentiments are shared by Real Estate Institute of Australia (REIA) president Hayden Groves, who said earlier this month, “the current CPI suggest[s] that the CPI has peaked,” adding, “it is time for the RBA to ease up on interest rate hikes at its first meeting in 2023 in February”.
The RBA’s hiking cycle’s impacts are further evidenced by the ABS’s Lending Indicators for last year’s penultimate month revealing new housing lending fell 3.7 per cent, the tenth consecutive month of declines.
Australia’s central bank will have the December quarter CPI figures heading into its meeting on Tuesday, 7 February, with Mr Raine believing “more consideration needs to be given to many young Australians who want to achieve the great Australian dream of home ownership”.
“The hikes have put too much pressure on household budgets thus far. Let’s not make the pain worse than it is.
“More should be done to help people get onto the property ladder, not hinder it,” he concluded.
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