Cash Rate up to 4.35%!
The Reserve Bank of Australia (RBA) has raised the cash rate by 0.25 percentage points to 4.35%. This increase is the 13th in 18 months and the first after a four month break. This increase is likely to dent the confidence of consumers already battling higher cost of living pressures and prompt a pause in the pace of growth in property prices but it is not likley to last.
If passed on in full, the extra 25 basis points would lift the monthly repayment cost of homeowners with a $500,000 mortgage up from the extra $1037 they have been paying since rates started rising last year, to $1116, according to comparison site Mozo.
It is expected that the cumulative weight of interest rate increases to date, including Tuesday’s quarter-percentage point move, will cause a reduction in activity and auction clearance rates. However Tim Lawless, research director for Core Logic, believes price declines are unlikely, even in Sydney and Melbourne, the two cities most at risk of a decline.