June cash rate: Stability Amidst Market Shifts
The Reserve Bank of Australia has held the cash rate at 4.35%, offering a welcome breather for mortgage holders after three consecutive hikes earlier this year. While this pause provides some short-term stability for household budgets, the broader property market is navigating major shifts. The cumulative 0.75 percentage point increase we’ve seen this year means the average homeowner is managing roughly $335 more in monthly repayments, while a typical buyer earning $120,000 has seen their borrowing capacity reduced by over $40,000. This tightening environment has naturally contributed to a slight cooling in property price growth and longer days on the market across many regions.
The landscape has been further altered by recent federal budget proposals targeting negative gearing and capital gains tax. Investors are feeling a swift impact as lenders begin removing negative gearing considerations from their calculations, resulting in a sharp 20% drop in investor borrowing capacity and a noticeable 27% decline in new investor loan applications. Meanwhile, first-home buyers are facing similar capacity constraints, with standard borrowing thresholds for a $120,000 income shifting down from roughly $644,000 to $601,000.
However, with fewer investors active and average open home attendance easing from over four attendees in January down to under 2.5 in May, a unique window of opportunity is opening up. The drop in buyer competition means less pressure on weekends, making it an excellent time for determined first-home buyers, next-home buyers, or strategic investors to make a move. With the next RBA meeting on August 11, understanding exactly where your borrowing power sits right now is essential to capturing these current market advantages.
Read More & Stay Informed You can read the full detailed report of the RBA Breakdown via the link below: 👉 [Link Here]
Dean Inzitari – Director & Principal Broker – dean.inzitari@loanmarket.com.au
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