The Reserve Bank of Australia (RBA) left the cash rate unchanged at 4.35% at its first monetary policy meeting of the year.

The move was widely expected, as it follows new Australian Bureau of Statistics data showing annual inflation fell to a two-year low of 4.1% during the December quarter.

This is notably lower than the 4.5% the RBA predicted in November, suggesting the 13 rate rises since May 2022 have slowed down the economy faster than anticipated.

As a result, market commentators increasingly believe the RBA’s next cash rate move will be down. That said, nothing is ever guaranteed – and inflationary pressures remain in the economy.

email received today (not written by me)

Real wages haven’t changed much.

New homes have risen by an average of $100K in the last 3 years. Land has gone up by an average of $200K.

That’s great for existing owners, because their homes will go up too, not so good for First Home Buyers and new borrowers.

How So? Let me explain….

House and Land Packages were selling in August 2019 for $570K. Interest rates were 4%, so the monthly repayments were $3,019pm if you borrowed the full amount.

Today the same package is selling for $845K. Interest rates are around 6.8%, so the monthly payment is $5,875pm if you borrowed the full amount.

Looking back at 2019, if the prices were the same today, what would the interest rates need to be for the monthly repayments to be around today prices / interest rates? 11.6% – 11.7%.

You don’t need to be a rocket scientist to figure out what is going on. This is why the Australian Economy is hurting. On top of the electricity prices going up.

Are you aware of why the electricity is really going up? Read this. Bastards.

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