In this month’s Finder RBA Cash Rate Survey™, 42 experts and economists weighed in on future cash rate moves and other issues relating to the state of the economy.
Almost all of the 42 panellists (93 per cent) believe the cash rate will increase on Tuesday, with the majority (86 per cent) forecasting another increase of 25 basis points — bringing it to 3.60 per cent in March.
Graham Cooke, head of consumer research at Finder, said this is the most dramatic series of rate rises in many home owners’ lifetimes.
“The rate increases so far have already added around $12,000 per year to the average 30-year mortgage,” he said.
“Finder’s Consumer Sentiment Tracker shows that 52 per cent of Australians are feeling financial stress due to the increased costs, with younger Australians experiencing the highest amount of worry.”
Matthew Greenwood-Nimmo from the University of Melbourne said inflation is unacceptably high and the RBA will be wary of it becoming entrenched.
“Higher interest rates will help to manage inflation and keep inflation expectations anchored at appropriate levels,” Mr Greenwood-Nimmo said.
Anthony Waldron from Mortgage Choice said he was anticipating another rate rise.
“I expect the Reserve Bank to raise the cash rate in March in its continued effort to contain inflation; however, we are likely nearing the end of this rate rise cycle,” Mr Waldron said.
Beyond March, more than half of experts (55 per cent) believe the RBA will hold the cash rate in April.
“We’ve seen several survey results expecting a pause in rate rises over the last few months, but this is the strongest result yet.
“While inflation has yet to be calmed, home owners deserve a break from the relentless increase in pressure,” Mr Cooke said.
More than a third (36 per cent) of Aussie home owners said they struggled to pay their mortgage in February, according to Finder’s Consumer Sentiment Tracker.
Most of the experts agreed the RBA needs reform, with more than two in three experts who weighed in (68 per cent, 23/34) believing the RBA should release more details of the board’s decision-making and just over half of the panel (56 per cent, 19/34) believing the RBA should do more explanatory announcements and/or press conferences.
Finder also found that a staggering 13 per cent of Australians — equivalent to 2.6 million people — have been forced to find a more affordable property as the cost of living bites.
A further 8 per cent of Aussies are moving to a cheaper rental as affordability worsens.
