An expert predicts that the Reserve Bank of Australia (RBA) could cut interest rates up to 10 times in the next two years.
According to a report by Realestate, Sameer Chopra, the Pacific region head of investment company CBRE, stated at a recent economic forecast meeting of the Victorian Real Estate Association that Australia’s first rate cut could come by the end of this year, with the possibility of multiple cuts in 2025 and 2026, totaling 8 to 10 rate cuts.
Chopra believes that cash rates need to return to 2019 levels, rather than those of 2020 and 2021, as is the trend worldwide.
However, Nerida Conisbee, Chief Economist at Ray White Real Estate, expressed a more conservative view during the meeting, stating that the prediction of 8 rate cuts by 2026 is overly optimistic. She forecasts around 4 rate cuts by 2025, equivalent to a 1% decrease in mortgage rates.
With interest rates declining and demand increasing, Chopra anticipates that by 2028, weekly apartment rents in the Melbourne city center could rise by $200.
CBRE’s Australian Apartment Outlook report estimates that rents for apartments in 15 regions could increase by up to 30% over the next five years, including North Melbourne.
Melbourne needs to build approximately 36,000 apartments each year to meet market demand. Insufficient construction could increase the risk of rising rents, while areas with ample housing construction would experience less pressure on rent increases.
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