Interest rate outlooks for 2013 & 2014.
Article by Mozo
Those with any sort of participation in the home loan market will likely be trying to guess where interest rates are headed for the remainder of the year and beyond but with so many mixed signals, drawing a conclusion is proving to be a difficult task.
The global economy looks to be getting back on its feet and the outlook locally is mostly positive but with growth in the resources sector expected slow, all effort is going into resuscitating the housing market to fill the void. The lack of impact from the last few rounds of interest cuts has many arguing that further cuts are necessary to give the market the boost it needs. However, according the statement the Reserve Bank gave with the last interest rate announcement, there is room to cut if the RBA sees neccessary but for now they are choosing to see how things play out.
This leaves not just the average homebuyer or homeowner left guessing whats in store but even leading economists are giving clashing outlooks into the near future for Australia's cash rate, reports the Property Observer based on the latest Bloomberg survey of banks and financial institutions..
With the official cash rate currently at a low 3.0 percent, HSBC's Paul Bloxham expects that there will be a 0.25 percent increase through the course of the year. On the other hand, Macquarie's Richard Gibbs foresees the cash rate falling a further 100 basis points down to 2 percent.
Nine economists expect the cash rate to average around 2.75 percent throughout the year, while another ten expect it to remain around 3 percent and another seven who foresee a further two cuts to 2.5 percent. This leaves an average outlook amongst the banks leading economists for a median cash rate around 2.75 percent throughout the year.
While this may give a clearer outlook to the remainder of the year, looking beyond into 2014, the guesses become even more jumbled. Outlooks begin from as low as 2.5 percent by the ANZ and up to 4.25 percent by Laminar Capital. The overall median outlook is for a cash rate of 3.25 percent for 2014.
Which ever direction interest rates take, Aussies entering the home market for the first time or looking to refinance can keep their interest repayments to a minimum by comparing the market and finding the best home loan interest rates available, here.
Have a question about home loans? Ask the gurus at Mozo Answers.