Welcome to our August newsletter with updates on the RBA cash rate, property growth and construction costs.

Interest Rate Update

The RBA held the cash rate at 4.35% in their August meeting, with inflation numbers persistent at slightly higher than forecasted levels. Inflation figures were up in the June quarter to 3.8%, from 3.6%.

Major banks are pre-empting RBA rate cuts by cutting their interest rates offered on term deposits. The major banks don’t want to be locked in paying interest on term deposits when they see RBA rate cuts coming. Experts predict there won’t be a rate cuts until December 2024 at the earliest due to the lingering inflation.

There are multiple banks (including one major) that have moved their fixed rates below 6% for the first time in over 12 months.

Property Prices

Corelogic provided their monthly update and it shows Melbourne property prices fell 0.9% in the three months to July 2024, with growth of 0.2% over the past 12 months.Source: CoreLogic

This is a different story to the rest of the country, with Perth, Adelaide and Brisbane all showing strong growth over the last 3 months to July 2024.Source: CoreLogic

Constructions Costs

Price rises for building and construction costs are slowing, with only single digit growth in the last 12 months to June 2024, there was a 1.1% increase in some material prices in this period which is getting back to the industry norm.

These easing costs have assisted in the build times for projects, but experts say construction workers are still hard to find which means building and renovating could still be expensive and difficult in the short term.