Based on key indicators, have we seen the bottom of prices and are we heading back to new highs?

Let’s see what key changes are happening, and what the numbers are saying.

After 10 months of consistent property price falls, March data showed an increase in home values of 0.6%, after February was essentially flat at -0.1%.

RBA with a pause in rate movement has also placed a sense of confidence in property owners and buyers, after Deloitte’s latest forecast suggested teh last two RBA hikes in 2023 were “unneccessary” as commented by Australian Chamber of Commerce and Industry CEO Andrew McKellar. “We certainly agree that the Reserve Bank did the right thing by pausing last month,” he told Sky News Australia. “We would urge them to keep pausing again as they meet at the next month – we don’t think at this point we need to keep rising interest rates.”

Coupling these comments with the news of the announcement of The Reserve Bank board being stripped of its power to set interest rates and replaced by a board of monetary policy experts, there is a sense that we’ll see rates decrease sooner than expected.

The latest inflation data, where inflation was announced at 6.3% month on month in March (down from 6.8% in February) & 7.0% quarter on quarter (down from 7.8% in December quarter).
What does this mean?
This is what the RBA was looking for in relation to pausing on the RBA cash rate - this isn't the only data they consider, however this is the primary driver.

Economists are now moving their predictions towards the cash rate will hold steady again at next weeks board meeting. With no more rises in the inflation level that are unexpected and unaccounted for, we may have seen the last of the interest rate rising cycle from the RBA

The economic outlook and predictions from most economists is for the cash rate to be cut in 2024, perhaps earlier, providing some welcome relief for home-owners, investors, and sustainable housing developers alike. Watch and see…