The slight reprieve for property owners and investors might come to an end, with the latest inflation data leading many experts to predict the RBA will end its four-month hold spree within the fortnight. 

If the central bank increases the cash rate on 7 November, home loan interest rates offered by banks and lenders probably won’t be far behind. 

When it comes to the market, rising rates may lead more buyers to shift their property aspirations in a bid for greater certainty, Aus Property Professionals founder and managing director Lloyd Edge said. 

Speaking to The Savings Tip Jar podcast, produced by Your Mortgage parent company InfoChoice Group, Mr Edge noted a November hike could weigh on the property market during the holiday period. 

However, even if a hike is implemented next month, the market will likely swing higher in the new year.

“People are still bullish, people want to get ahead with property, but it just comes down to strategy,” he said. 

“It means that people who might have been wanting to buy in a certain market have said, ‘no this doesn't work for me anymore, I need something that [provides] positive cash flow’.

“Or … something we can add value to. I have a lot of people who [want to] do renovations, or developments, subdivisions, all those sorts of things that help people add value to property.” 

Talk of a potential November hike has been ongoing for some time now, with yesterday’s inflation read shoring the expectations of many experts.

The Australian Bureau of Statistics (ABS) revealed the consumer price index (CPI) rose 1.2% in the September quarter and 5.4% over the prior 12 months on Wednesday. 

NAB has been expecting a cash rate hike in November for many months now. 

CBA has been shifting its forecasts slightly, ascribing a 40% chance of a hike earlier this month before changing gears to tip an increase on Wednesday afternoon.

ANZ and Westpac also stepped into hawkish territory this week, with Westpac chief economist Luci Ellis the last to call a hike. 

Ms Ellis recently deferred from the RBA’s ranks, having spent seven years as an assistant governor at the central bank.

“At 1.2% in the quarter, both headline and trimmed mean inflation was a little higher than the Westpac team expected,” she said on Thursday.

“So yes, I’ve seen enough to make my first-ever rate call to be a prediction of a hike.”

But the four consecutive pauses put forward by the RBA since June are said to have helped buoy the property market through the spring selling season.

“What we're seeing at the moment is a shift, essentially, from what was a buyer's market back into a seller's market,” Mr Edge said.

“We've seen high interest rates throughout the year, but over the last four months they've been put on hold, which has provided some positive sentiment for some potential decreases in rates coming over the back half of next year. 

“With people thinking like that, it's actually seen the market start to move forward with a little bit more excitement … and we've actually seen three or four months of consecutive growth in some of the capitals, such as Sydney and Brisbane.”

Increasing stock levels have also likely helped increase enthusiasm among buyers, particularly after many struggled amid a lack of options earlier in 2023.

Australian house prices will reach record highs in 2023: Domain

Recent data from Domain shows Australian house prices are within $2,000 of their record high, with that gap expected to close before the year is out. 

House prices in Sydney and Brisbane are on their way to meeting record highs before the end of the year, with those in Perth and Adelaide having already surpassed their prior peaks.

House prices in Canberra and Darwin remain around 11% lower than record highs and house prices in Melbourne and Hobart have 5.7% and 6.1% respectively left to climb to recover previous falls. 

“It is worth pointing out that the pace of growth is currently being somewhat contained by the stretched affordability,” Domain chief of research and economics Dr Nicola Powell said.

“If mortgage rates weren’t as high as they currently are, price growth would be faster with the current housing undersupply. 

“So for buyers who are in the position of considering purchasing, it is important to weigh up the pros and cons of delaying their purchasing timing along with financial planning.”

Dr Powell notes that new owner-occupier home loans typically offer a 5.98% p.a. interest rate, as per the latest RBA figures. 

Of course, that could increase alongside the cash rate if the central bank were to hike next month.

Meanwhile, CoreLogic is heralding a ‘super Saturday’ auction event this weekend, with 2,883 homes set to go under the hammer, adding to what's set to be the busiest auction week since May 2022.

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
Featured Online ExclusiveUp to $4k cashback
  • Immediate cashback upon settlement
  • $2000 for loans up to $700,000
  • $4000 for loans over $700,000
5.94% p.a.
5.95% p.a.
Principal & Interest
5.95% p.a.
5.95% p.a.
Principal & Interest
5.99% p.a.
5.90% p.a.
Principal & Interest
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .

Image by Trinity Nguyen on Unsplash.