With the first cash rate announcement for 2023 set for the first Tuesday in February, Angus Raine, Executive Chairman of Raine & Horne says it’s time for the back-to-back interest rate rises to come to an end.

According to the latest data from the Australian Bureau of Statistics (ABS), the monthly Consumer Price Index (CPI) indicator for November rose 7.3% during the year to November. However, the rise was below the budget forecast of 7.75%, and the RBA forecast of 8%.

“It’s imperative that the RBA holds off on adding another consecutive hike until the full brunt of the continuous hike since May 2022 has had on consumer confidence and inflation is understood,” Angus says.

“Australian mortgage holders and prospective buyers – particularly first homebuyers – need a break from the constant rate increases.

“The seven successive rate hikes have no doubt achieved their intended impacts and many Australian households are feeling the pinch.”

Moreover, Angus says already some green shoots of positivity are appearing. On Sydney’s Northern Beaches for example, Raine & Horne Mona Vale is reporting a spike in listings and increases the numbers of groups at open for inspections. “We just need the RBA to do its bit and take the foot off the monetary policy pedals to give vendors and buyers a break.” 

Meanwhile, Real Estate Institute of Australia (REIA) president Hayden Groves said that while the latest ABS data was up on October’s annual figure of 6.9%, it was the same figure as September and was below the budget and the RBA forecasts, which all pointed to a slowing of inflation. 

“The largest increases were for housing (9.6% compared to 10.5% for the 12 month to October 2022), food and non-alcoholic beverages (9.4% compared to 8.9% for the 12 months to October 2022) transport (9% compared to 7.4% for the 12 months to October 2022).

“Whilst, new dwelling prices rose 17.9% in the year to November, the rate of price growth eased in November, compared to the 20.4% annual rise in October.”

Hayden said rent prices increased further in November, from an annual increase of 3.5% in October to 3.6% in November, reflecting the continuing tight market and low vacancy rates.

“With the RBA minutes of its December 2022 meeting showing that the board expected a sustained decline in inflation in 2023 and the current CPI suggesting that the CPI has peaked, it is time for the RBA to ease up on its interest rate hikes at its first meeting in 2023 in February. 

“At that time, it will have the December quarter figures for the CPI.”

Angus Raine agreed: “More consideration needs to be given to many young Australians who want to achieve the great Australian dream of home ownership. 

“The hikes have put too much pressure on household budgets thus far. Let’s not make the pain worse than it is.

“More should be done to help people get onto the property ladder; not hinder it.”