New home sales remained low in February

than anticipated. This is because of the financial uncertainty and because rapidly rising interest rates are now starting to have an effect on households and businesses (there is a lag of between 3-6 months between the time the RBA changes rates and the impact on the economy).

What does that mean for the rest of 2023?

The Markets expectation is that the cash rate has peaked at 3.60% and will either cut by 0.25bps and/or remain stable over the next 3 to 6 months.

My opinion is that the RBA will hold rate steady in April. This is because our economy is fairing a little better than other major economies (unemployment fell to 3.5% last month) and the banking sector and financial market issues have not hit our shores. This will likely see the RBA pause and take stock of how the Australian economy is performing.

What does it mean for property markets?

A rate cut, or hold, by the RBA in April should send a positive message to property market participants. This is because rising interest rates have been a major factor is soft buyer demand and price declines experienced over the past 12-months.

This could see the recent lift in buyer demand and enquiry (elevated auction clearance rate, price growth in Sydney and Melbourne) continue and even potentially strengthen over the remainder of the year.

Please let me know if you have any questions or require more information.

*This is the opinion of LJ Hooker Bribie Island with the information at hand. #RBA #interestrates