Since May 2022, Australia has witnessed one of its most intense monetary tightening phases, led by the Reserve Bank of Australia (RBA), aiming to control high inflation. Now, many speculate that this trend might reverse, leading to discussions about when Australia’s interest rates will decrease.

Experts predict a possible decline in interest rates by 2024. The Big Four banks have varying forecasts:

Commonwealth Bank predicts four cash rate reductions starting in March 2024, ending with a 3.10% rate by year’s end.
Westpac expects a gradual decrease, forecasting a rate drop in September 2024, followed by another in December to 3.60%.
NAB anticipates a cut in August 2024, with a return to around 3% by early 2025.
ANZ predicts an extended cash rate pause, followed by a reduction towards the end of 2024.
These predictions, however, are not certain, as global economic shifts or domestic policy changes can influence the RBA’s decisions.

Regarding inflation, the RBA aims to maintain it within 2-3%. Current trends suggest inflation is decreasing, aligning with RBA’s expectations of 4.5% by end-2023 and 3% by mid-2025.

For borrowers, staying informed about RBA’s cash rate decisions is crucial. In 2024, the RBA will make eight cash rate decisions, a change from the previous 11. Four meetings will occur on the first Tuesday of February, May, August, and November, with the other four scheduled between these dates.

Regularly reviewing home loans is also advised, especially for those who haven’t done so in the past two years. Considering a home loan health check can help assess current loans in the evolving mortgage landscape and determine if refinancing is beneficial.

For those considering property purchases, discussing the potential impact of interest rate drops on borrowing capacity and preparing for future property acquisitions is recommended.