WHAT’S AHEAD IN 2024
15 January 2024
Interest rates may drop
All four of the Big Banks are predicting the cash rate will drop in 2024.
Commonwealth Bank expects a cash rate drop as early as March, while NAB is anticipating the RBA will cut the cash rate in August. Westpac believes the RBA will lower rates in September and December. ANZ anticipates a cash rate drop towards the end of 2024.
The RBA will have a shake up
Treasurer Jim Chalmers and RBA Governor Michele Bullock are working through the details, but we will likely see some of the recommendations of the RBA review implemented in 2024.
Former governor Philip Lowe in July committed to cutting the number of board meetings to eight from 11 from next February.
For borrowers, that means there will be more time between decisions for borrowers to adjust to any changes in the cash rate.
Property prices may continue to climb
The property price rebound looks set to continue into 2024.
According to the Domain Forecast Report Financial Year 2023-24, house prices in Sydney, Adelaide, and Perth, and unit prices in Brisbane, Adelaide and Hobart, could have fully recovered from the 2022 downturn by the end of this financial year. Sydney is expected to lead the way, with house prices rising 6% to 9% by the end of June 2024.
Rental growth may slow
It may not be great news for investors, but renters will be happy to know that rental growth may slow in 2024. There are a number of reasons for this, according to CoreLogic Head of Research Eliza Owen.
For one, rents move with interest rates, and interest rates could fall next year.
Housing preferences could also change, with people moving to share houses as income growth softens and rents become less affordable.