The latest data from the Australian Bureau of Statistics shows that Australia's inflation rate headed lower in May. The yearly headline CPI came in at 2.1 percent in May, following gains of 2.4 percent in the previous three months. This was lower than most economists had forecast, with the average prediction being around 2.3 percent. The other key figure that is watched closely by the Reserve Bank, (the “annual trimmed mean inflation”), also dropped sharply from 2.8 percent to 2.4 percent, its lowest level since late 2021.

As a result of these falls, the financial markets have now priced in a 90 percent probability that the RBA will drop official interest rates at their next meeting, which is due to be announced on July 8th. Despite the fact that we have already had rate cuts in February and May this year, the markets have priced in expectations that we could see as many as three more rate cuts before the end of this year.

A prime example of the changed forecasting that we are seeing comes from the Commonwealth Bank. Their analysts have brought forward their predictions of an August interest rate cut to July, saying they expect the cash rate to drop from its current 3.85 percent to 3.60 percent. What’s more, the CBA also expects the RBA to repeat the cuts with another reduction in August. If that happens, it would see the cash rate come down to 3.35 percent, which is great news for anyone with a mortgage or those trying to get their foot in the property market.

As we mentioned in A POST LAST MONTH, anyone thinking of making their next move in 2025 now has some very good reasons to consider taking that step sooner rather than later. So if you would like an obligation-free update on what your property could achieve in these favourable selling conditions, you can give our team at Barry Plant Thomastown a call this week on 9466 3233.

We’re always happy to assist.

Cheers,

Con Constantinou

Barry Plant Thomastown