Crystal Ball Gazing

As quoted in an REIQ article some economists are forecasting that interest rates will not rise in the next two months which is when the new Reserve Bank Governor will preside over her first meeting.

Further forecasting suggests that the new Governor may decrease rates within her first months with the interest rate to be reduced to the low three’s by the end of 2024.

With the current interest rate at 4.1% it is reported that new home loans have increased 4.8% in May 2023. Investor lending has increased the most at 6.2%.  Total lending has increased 45% from $17 billion in June 2020 to $25 billion in May 2023.

So what does this all mean?  If you know then you have the key to the safe.  What it seems to suggest is that despite interest rates increasing over the last 12 months, lending has continued to increase.

With forecasts suggesting that interest rates will decrease over the next 12 months, does that suggest that loans will continue to increase?

As always I guess that time will tell!