The Reserve Bank’s shock decision to keep interest rates on hold took many by surprise.
Despite 90 per cent of market experts predicting a cut, the RBA opted to wait for more comprehensive inflation data due at the end of July.
But what does it actually mean for first-home buyers trying to break into an already overheated property market?
On Wednesday afternoon’s episode of The Briefing, we chat to leading financial expert Sally Tindall from Canstar to unpack why rates were kept on hold this time and what the RBA is set to do next.
For first-home hopefuls, a rate cut would have slightly increased borrowing power, by around $12,000 for someone on an average income.
However, Tindall warns that wouldn’t have made a major difference.
“Don’t feel like you’ve missed out,” she said.
Tindall said a cash rate cut can drive up competition in the property market, as sellers often come out as the biggest winners when borrowing power increases.
“You’ll find at heated auctions more and more people are putting up their hands because the bank has said they could borrow more.”
Instead, she suggested buyers focus on what they can afford, rather than on the RBA’s next move.
“You don’t wanna be basing a very big financial decision on the next couple of decisions from Governor Bullock and the rest of the board,” she added.
“You wanna be doing it on something that you can actually manage, come what may.”
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