Amidst all the bad news of 2022 comes some good news at last.
It is just possible that the rate of inflation in Australia has peaked (in October) earlier than predicted by economists (The Australian 1 Dec 2022: Robert Gottliebsen).
(By the way – what do you call 100 economists in a room?… a vacuum!)
If that is the case, then it is just possible that the rate rise in December (0.25%) and then February (0.25%) could be the last.
In my opinion that would even be wise – given that in 2023 many fixed rates written during Covid will roll to variable – there is a huge section of the economy unaffected yet. The lag effect from The Reserve Bank rises will be very real.
If the cash rate does peak at 3.1%, then your rate will peak between 5.1 and 5.3% which is UNDER the 5.5% that I have been asking you to plan for.
I note with interest that even Bill Evans (Westpac Chief Economist) is not looking further ahead than February just yet.
There is a wait and see mood beginning to gain traction.
The first sign of some good news at last.
As always if you’d like advice tailored to your own personal circumstances please call or email me anytime… It’s what I’m here for.
Ask Alan – Alan Heath, Australia’s Trusted Mortgage Broker