November 2024

As we move through the final quarter of 2024, several key financial developments in Australia are shaping the economic landscape and may influence your financial plans.

The housing market continues to be a critical issue. While rental prices have shown early signs of easing, the broader housing crisis remains a challenge, particularly for first-time buyers. Property prices remain high, leading the government to ramp up support for affordable housing initiatives. This is expected to provide some relief for low- and middle-income Australians, who continue to bear the brunt of housing affordability pressures.

In the monetary landscape, the Reserve Bank of Australia (RBA) has paused its interest rate hikes after two years of steady increases. This pause reflects the slowing economy, with consumer confidence remaining fragile and retail growth hitting its lowest level in over 40 years. Business closures, particularly in the construction, hospitality, and retail sectors, have risen, underscoring the difficult environment.

However, there is growing speculation that the RBA may be considering rate cuts in the near term. As inflation pressures ease and economic growth slows, a rate cut could provide much-needed stimulus to support both consumers and businesses. The pause on hikes has already given the economy some breathing room, but if economic indicators remain weak, a rate reduction could be the next logical step to prevent a deeper downturn. The central bank’s focus is now shifting from inflation control to ensuring the economy avoids a recession, which could benefit borrowers and businesses alike if rates are cut.

The retail slowdown, coupled with ongoing economic challenges, underscores the importance of staying informed as conditions evolve. Should the RBA decide to cut rates, it could offer further opportunities for borrowers, home buyers, and investors to reassess their strategies.

Navigate these changes with SCM 

As always, we are here to assist you in navigating these economic shifts and ensuring your financial plans remain resilient.

SCM Financial Group Investment Committee