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What does the future hold for interest rates?

Real estate & property news
08 January 2022
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If you’ve been able to attend a friendly barbecue or two over the past few weeks, chances are one of Australia’s favourite discussion topics came up in conversation…yes, interest rates.

It seems that barely a week goes by without someone making predictions about what the Reserve Bank is going to do with official interest rates or what the Banks are going to do with their own interest rates, and when they’re going to do it.

With this in mind, we thought this might be a good opportunity to look ahead at what the experts are forecasting, and how that might affect the property market in the City of Moonee Valley as we move through the next year or two.

Firstly, it’s important to differentiate between the “media chatter” from people who are paid to fill up space in our papers and websites, and the informed comments from people like the RBA and the financial markets who are paid to provide accurate information. Here at Barry Plant Moonee Valley we prefer to follow the latter.

Now, while the general consensus seems to be that the next move in interest rates will upward, (let’s face it, there’s not a lot of room for them to go the other way), there’s a fair bit of variation in WHEN people think they will rise.

If you look to the major banks, you will find that at the moment the Commonwealth Bank is predicting a rise in November 2022, Westpac is saying February 2023, the ANZ is suggesting the first half of 2023 while the NAB is forecasting mid-2023. This is despite the Reserve Bank’s published comments that suggest it won’t happen until 2024.

The Reserve Bank has said that it wants to see a sustained improvement in wages growth and inflation before it lifts the cash rate, stating that raising interest rates too quickly could derail the recovery from the impact of the pandemic.

What many people don’t realise is that these expectations have already been factored into a number of lender’s offers. One of the online mortgage sources recently said that in the month to mid-December, over 60 lenders around the country had lifted the rates on their fixed-rate loans.

Our expectation is that talk of interest rate rises, (as opposed to actual moves by the RBA), will increase towards the end of 2022. So if you’re considering making a move this year, that’s one more good reason to look at doing it earlier in the year when a higher level of certainty is likely to make your sale (as well as your refinancing) a more enjoyable experience.

Of course, if you would like a confidential discussion of your options, or an update on what your property could achieve in today’s strong market, feel free to give us a call this week at Barry Plant Moonee Valley on 9373 0000.


Bill Karp

Director – Barry Plant Real Estate

Essendon, Keilor East & Gladstone Park

Real estate & property news
08 January 2022
Save Article

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