Want to invest in property but not sure where to start?
You’re not alone. Many Aussies are searching for property investment tips that cut through the noise and offer real value. In this guide, we cover essential strategies every investor should know—from how to assess your financial position to setting clear goals and knowing when to hold, upgrade, or sell.
It’s election month and love is in the air (not from the RBA, mind you, and for a limited time only from the pollies – their love offer ends 3 May).
So much love in fact that we are redefining the word bumper (what a bad segue but it will have to do). From now on, we will only ever refer to the word ‘bumper’ as BUMPER – because we have seriously outgrown bumper – well, at least for this issue.
In this month’s newsletter, you’ll find a BUMPER mix of stories:
- Best interest rates
- Women of Oz – a worthwhile cause
- Wills – Simple Trusts Vs Testamentary Trusts
- Buffett’s wisdom
- Renewable benefits you won’t see in the mainstream media
- Your property investment journey guide
- Starting a business? Three innovative contributions
- Sharemarket rises and falls are not new
- The future of cars (and it’s not Cars 4)
- ATO debt defaults & business failures
- Home loan deals for essential workers
- High LVR loans – good or bad for you?
- More listings hitting the market
- 5 ways to add equity to your home
- RBA keeping eagle eye on inflation
Read more below.
Best Rates
We now all know that the RBA did not change the Cash Rate at its meeting on Tuesday. An analysis of the reasoning is provided in the last article in this newsletter. Basically, inflation is trending in the right direction, but it’s got a little bit to go in order to get below the 3.0% upper end of the RBA’s range (and on a consistent basis).
The interest rates below are current as at 29 March 2025.
Please note:
- All lenders on our panel have now reduced their rates since the RBA Cash Rate reduction of 0.25% pa on 18 February. That was over a month ago.
- Some lenders only reduced their rates on 26 March (for example).
- If / (when?) rates drop again, then based upon recent experience, you might find you are waiting up to six weeks to get your rate cut.
- Plus, when a lender announces their rate decrease and when they implement the rate cut…. well, there can be three or four weeks in between. No doubt lenders will have good logistical reasons for this delay but I do wonder about the potential positive impact of this delay on their profits (just saying….).
- The rates below exclude clean energy rates, first home buyer rates and packages and construction loan rates and an offset feature (where applicable).
- Interestingly (and I am not sure why), the rates below for Owner Occupiers are slightly higher than last month. Profit taking by lenders? Global uncertainty? Election fever? Who knows!
Owner Occupiers
Principal and Interest
- Fixed Rates: from 5.64% pa – 2 and 3 year terms – last month: 5.49%
- Variable Rates: from 5.64% pa – last month: 5.58%
Clean energy loans: Fixed Rates from 5.14% pa (last month: 4.84%) and Variable Rates from 5.43% pa (last month: 5.13%)
Interest Only
- Fixed Rates: from 5.74% pa – 2 year term (last month: 6.24%)
- Variable Rates: from 6.14% pa (same as last month)
Investors
Principal and Interest
- Fixed Rates: from 5.74% pa – 2, 3 and 5 year terms (same as last month but now includes 3 and 5 years at this rate)
- Variable Rates: from 5.79% pa (same as last month)
Clean energy loans: Fixed Rate loans from 4.94% pa (same as last month); Variable Rates from 5.29% pa (same as last month)
Interest Only
- Fixed Rates: from 5.64% pa – 2, 3 and 5 year terms (same as last month but now includes 3 and 5 years at this rate)
- Variable Rates: from 6.09% pa (last month: 6.08%)
Women of Oz: a worthwhile cause
I have been involved in the Not for Profit (NFP) space for quite a few years now. Yes, the altruistic part of me benefits from my NFP involvement (thanks for pointing this out to me, Daniel Pink, all those many years ago when I read Drive: the surprising truth about what motivates us – cool link) .
But, the end result is about helping those who are less fortunate than you who you can help.
Women of Oz Wheels 2 Freedom Fundraiser
So here is a shout out to the Women of Oz and their Wheels 2 Freedom Fundraiser
PLUS
You can enter their Raffle to win a bathroom reno worth $20,000.
Paige Lamoureux, the CEO of Women of Oz, says,
For women who have fled domestic violence,
a car can be a lifeline.
It provides the freedom to escape dangerous situations,
access essential services,
and rebuild their lives with a sense of independence and security.
Wheels 2 Freedom Fundraiser
Two links to support Women of Oz:
A heartfelt thank you!
Before I go, let me give a MEGA SHOUT OUT to those extraordinary volunteers who are donating their time and materials to convert the major prize into someone’s dream: a bathroom reno valued at up to $20,000.
These are truly remarkable business owners who are giving back to their community in a way which will leave you astounded
– Yanal Shyamji, the owner of Triple Zero Group with invaluable contributions from Daniel Brne, Ravenhall Group – electrical, and Andrew Forder, WPG Plumbing.
Yanal, Daniel and Andrew, you are magnificent! 🙏
Wills - Simple Trusts Vs Testamentary Trusts
An article from David Davis, Partner at David Davis & Associates, wrote an interesting article on this topic. Here is the link to David’s article:
Key points I noted:
Wills are important for two main reasons:
- To ensure your assets are managed and distributed according to your wishes.
- Affording asset protection and tax effectiveness for your beneficiaries.
Simple Trust Wills
- The most common form of will.
- Good for simple and smaller estate distributions – cost effective and timely.
- Distributes assets directly to the named beneficiaries.
- Outlines how your assets are to be distributed – often as ‘simple gifts’ to your beneficiaries.
Testamentary Trust Wills
- One or more trusts are created upon your death.
- A trustee manages and controls these trusts as well as the distribution of the assets and income to the beneficiaries of the trust.
- Good for when beneficiaries are under what you have deemed their preservation age – or they are a minor – so the trust assets are held until they reach the required age.
- Beneficiaries have the option of taking their inheritance inside a trust structure or taking their inheritance in their personal names.
- Beneficiaries can stream income and capital (i.e. assets) generated by the trust to other beneficiaries (such as partners or children). This is good for tax planning.
- The beneficiaries’ inheritance (income and assets) is protected from their creditors as well as legal claims and potentially family law-related issues.
Buffett's wisdom
Warren Buffett has built a trillion-dollar business (Berkshire Hathaway) by investing wisely: Investing when others were fearful and converting to cash when others were greedy.
His guiding principles
Buffett lives his life by three guiding principles:
Integrity is a non-negotiable
He once said, “In looking for people to hire, you look for three qualities: integrity, intelligence, and energy. And if they don’t have the first one, the other two will kill you.”
Honesty pays off
Being honest isn't just about moral integrity—it's also a powerful productivity tool. Honesty saves energy that would otherwise be spent on hiding mistakes, bending the truth, or fearing discovery. It sharpens focus, boosts efficiency, and enhances confidence in every task. Moreover, honesty cultivates clearer communication. By being upfront, you sidestep needless conflicts and misunderstandings, paving the way for smoother teamwork and more effective leadership.
Generosity leads to more success
Generosity may not boost your bank account directly, but it has a powerful impact on your career, reputation, and happiness. Studies show that giving to others increases happiness, and happier people are more motivated, productive, and successful. In fact, people find more joy in spending money on others than on themselves, which encourages further generosity. Generosity also strengthens relationships. It fosters deeper connections and creates opportunities for collaboration, mentorship, and growth
Recent articles on deciphering Buffett's investment strategy
Thanks to The Motley Fool and Inc.
- In 2024, Berkshire Hathaway sold $134 Billion of stocks and built up its cash pile.
- Berkshire Hathaway has built up cash reserves of $334 Billion (yep, you read that correctly).
- Berkshire Hathaway has repurchased its stock for 24 consecutive quarters (that’s 6 years straight) – before breaking this streak in the last two quarters of 2024 – is his own stock too expensive?
- Over the last 6 weeks, Berkshire Hathaway’s increased its holdings of 8 of its ‘forever stocks’ (stocks he has no plans to sell): Coca-Cola, American Express, Occidental Petroleum and 5 Japanese trading houses (Mitsubishi, Itochu, Mitsui, Sumitomo and Marubeni.
- 47% of Berkshire Hathaway’s $283 Billion stock portfolio is invested in just 3 companies: Apple, American Express and Bank of America.
Closing observations
- Most media tipsters get it wrong more often than they would care to admit. (It’s a bit like most bank economists get the housing cycle wrong when there is a movement in interest rates).
- Tipsters may have self-interest at heart.
- They are like a sophisticated taxi driver. Listen to what they say then do the opposite.
- Fundstrat Global Advisors cofounder Tom Lee noted: in 2024, the market’s 10 best days added up to 20 percentage points for the S&P 500. But excluding those 10 days, the index was only up 4%.
Renewable benefits you won't see in the mainstream media
- Glass Almanac: A groundbreaking study at a large solar installation in the Talatan Desert shows that solar panels do more than capture the sun’s energy. They also impact soil conditions, promote vegetation growth, and influence the local climate. These findings could shift our understanding of how renewable energy interacts with the environment.
- news.com.au: In a one-minute clip on TikTok, the Chinese-made SUV backs into the exchange station, which is about the size of a car mechanic’s bay and waits as a new battery is uploaded from a basement below the station – all within one minute. Just think about that for a minute.
- Renew economy: as batteries become bigger, and with longer storage durations, their influence on the balance of supply is becoming more obvious. In South Australia’s evening peak, up to 20.8% has been supplied by batteries. This is only going to grow – fast.
- Sustainability Times: Chinese scientists have unveiled a new battery material (Niobium Tungsten Oxide – who would have thought…. 😉 ) that charges in seconds without compromising capacity or lifespan, promising to dramatically reduce charging times and enhance energy efficiency.
Your property investment journey guide
From a property investment advisor
Gaurav Bhatia, Equitymax is a Property Investment Advisor. He is a ‘details man’ and likes to make sure his clients have the research they need before investing in property. Plus, he follows his own advice and is an owner of multiple investment properties – both residential and commercial.
Gaurav’s #1 tip for investment property owners
Tip: Regularly review your property portfolio
Every year, Gaurav assesses his clients property portfolio – because things change – and sometimes faster than you would think. And, just like in any business, you need to stay on top of your asset base to ensure it is optimised for your income and capital return objectives.
Whilst the decisions are simple, the information behind the decisions can be in-depth. This is where Gaurav’s expertise shines.
Decision #1: Hold
The property is showing the anticipated income and capital returns and no changes are expected in the near future.
Decision #2: Upgrade
The property needs maintenance and/or capital works to retain the anticipated income and capital returns.
Decision #3: Sell
The property is no longer considered capable of retaining the anticipated income and capital returns and it is better to reallocate your equity to a project more in line with the returns you are seeking.
SPECIAL OFFER!
If you are a property investor
and you would like an independent review of your property portfolio,
let me know and I can put you in contact with Gaurav
Gaurav’s top five tips plus Gold bonus tips
Assess Your Financial Stability
Before making any big decisions, make sure you're financially secure. Buying an investment property involves significant upfront costs and ongoing maintenance, so it’s important to ensure you're prepared for this commitment.
My comment: There is nothing worse than buying a property, particularly a negatively geared property, then having to worry about where you are going to get the cash from to make the repayments. It’s even worse when you have bought the wrong property (or your timing was wrong) and it is not going up in value or the rent is not able to be increased. How do I know this? Because they were mistakes I made! (I wish I had known Gaurav a few years earlier!).
Set Clear Investment Goals
Have a clear idea of what you're aiming to achieve. It’s crucial to discuss your goals with a financial advisor. Remember, all investments carry some level of risk, and real estate is no exception. Know your objectives and align them with your financial capacity. This is where the research starts to kick in.
My comment: Property has one major advantage over shares: you can get much higher leverage which in theory can give you much higher returns on your investment. But, as with all good things, there is a warning: Be careful of the ‘over-leveraged negatively geared’ scenario touched on above. Negative gearing is great for short term tax relief but it is only a good thing when it is accompanied by strong capital growth which offsets the short-term negative cashflow (and the unit market in Melbourne did not do that over the past fifteen years – trust me, I know 😥 )
Consider the Time Commitment
Property management requires time and effort. Are you ready to take on the responsibilities of being a landlord, or would you prefer hiring a property manager to handle the day-to-day tasks?
My comment: Scrimping on a good property manager is really a false economy. It will come back to bite you if you don’t get property management right.
Plus, lenders prefer a rental property with a property manager as they get a proper lease and an arms length assessment of the rental market. Using a property manager de-risks the income earning potential for the property and lenders love less risk.
Get Pre-Approved
Securing pre-approval from a trusted lender is crucial. It helps you understand your budget, streamlines the buying process, and gives you peace of mind knowing what you can afford.
My comment: This is where we step in. Within half an hour or so, we do a quick initial assessment – we call it our Discovery Call – where we show you how much you can borrow and who will lend to you; so you get a really clear picture of your borrowing options and the likely cost. And, we do this transparently via a Zoom shared screen call so you get to see what we see.
Understand Market Trends
The real estate market can be tricky to navigate. Stay informed about current market trends to make educated decisions about your investment.
My comment: This is where Gaurav really stands out. You want on your side an investment property advisor who does the research. Gaurav takes it a step further – he gives you the research (be prepared for a decent read!), so you know the decision you are making is based upon more than a bit of marketing hype.
Plus 3 Gold Bonus Tips!
I caught up with Gaurav today (just after the RBA decided not to change interest rates), and we discussed what he does for his clients and how he does it.
You need a team
Think of property investment as being a business as that is what it is - it's a business based upon property generating you a return on income (via rent) and a return on capital (via property price increases). When you think of property investment as a business, you need the right professional team before you start. Gaurav requires clients to have the following professional advisors:
- Tax accountant – for tax effective structures and tax planning.
- Financial Planner – for risk mitigation via insurance.
- Broker – to organise the finance pre-approval so you can buy with confidence.
- Property Manager – to manage the property to make sure the income stream stays strong and consistent.
- Legal advisor – to handle the conveyancing as well as the more complex documents which can be part of the purchasing process.; plus of course important documents like Wills and Estate planning.
- Property Investment Advisor – which is what Gaurav does.
The right mindset is probably the most important part
As with most things in life, the right mindset can help you succeed whereas the wrong mindset will hold you back. Gaurav wants to work with those clients who want long term growth and long term relationships underpinning that growth.
Only 10% of what Gaurav does is involved in the purchase of property
Gaurav spends most of his time with the Planning and Assessment phases. Once he understands your objectives and he can see what you want is feasible and achievable, he will then go to work to find the right property which will fit your objectives.
If you would like some sound advice on property investing
and you want to work with someone who takes a long term view,
let me know and I will put you in touch with Gaurav
Starting a business?
Three innovative contributions
Use AI to do the hard yakka
If you’re thinking about starting a new business, turning to an AI chatbot like ChatGPT or Claude could be your first step. Steve Blank, a seasoned entrepreneur and author, suggests AI can be a game-changer for entrepreneurs. He compares using AI to having a smart friend offering helpful suggestions, even if not all of them are perfect.
AI can assist with market research, feedback, and even creating business plans without the hefty fees of a freelance consultant. Blank encourages first-time entrepreneurs to ask simple questions like:
- “I’m thinking about starting ‘X’. Can you find me a business model?”
- “Who should be my first customers?”
- “What do they care about most?”
- “Who should I test these hypotheses on and how can I find them?”
While AI is helpful, it can’t replace actual market research.
Blank’s “lean startup” method emphasizes
talking to real customers early on to test assumptions.
AI insights should serve as a starting point, not a substitute for hands-on research. Still, using AI tools gives entrepreneurs an edge over those who don’t, helping manage everything from market research to admin tasks.
Tips for starting a side hustle
Dr Jenny Woo says what we all know (but sometimes forget).
#1: Know your numbers
How much are you willing to invest, and potentially lose, before becoming profitable? Knowing this requires a realistic understanding of your initial net profit margin and ways to boost your profitability.
#2: Avoid common traps that can harm profitability
- Underprice your services: it is difficult to raise prices once you have set a low cost precedent. Jenny had to close.
- Failing to accurately account for your time: scalability gets you a return on your time.
- Value your time: the opportunity cost of your time needs to always be a touchpoint when you are doing something. What else could I be doing which could be creating more value?
#3: Begin with the end in mind, and put yourself first
Whilst making money is important, looking after your entire self is also of critical importance. Your physical and mental well-being come first.
The benefits of passive income are greatly exaggerated
Who doesn’t love passive income? Earn money while you sleep – sounds good, doesn’t it?
Well, the success of your income stream while you are sleeping will probably depend upon what you are doing when you are awake!
Amy Landino says beware the hype! As a video creator, she has some sage advice for wannabe passive income start-ups.
Her top three passive income lies:
#1: Passive income means you don’t have to work at all
Passive income requires significant upfront work and also, ongoing maintenance. Each video she creates takes about two hours — one hour for preparation and one hour for filming. Amy has created more than 1,000 videos about productivity and brand-building over the years.
Plus, existing video content still needs to be curated and updated.
#2: You need a lot of money to start
Not so. This might be the case for real estate and businesses, but a passive income stream can start from a passion (albeit one which can make you money – re-read the above article on Using AI to start a business).
#3: Passive income streams are ‘set and forget’
No way. They are not on auto-pilot.
In reality, the most successful ones require listening closely to your audience and adapting regularly to give them what they need (and are willing to buy or engage with) now — not two years ago.
Sharemarket rises and falls are not new
Chris Punty. OVG Capital, wrote an interesting article in LiveWire.
Some key points:
Bear markets, characterised by drops of 20% or more, are less frequent, appearing every seven years on average since World War II.
- Corrections often deepen: a 10% drop turns into a 13% decline about 80% of the time.
- 48% of corrections since 1945 escalated to a fall of 15% or greater.
- The data shows that less than 30% of corrections turn into bear markets.
- Bear markets are definitely not fun but corrections can be considered just a ‘cost of doing business’ as on average they’re recovered in just 4 months.
- Bear markets typically require a recession or a couple of quarters of negative GDP and earnings to take hold.
- The average bear takes two years and two months to come out of hibernation and regain their highs.
- The good news? Markets tend to roar back after hitting bottom.
Historically, the S&P 500 has delivered an average return of +19% in the first year following a correction and +37% over two years. After bear markets, the numbers are even more impressive: gains average +43% in the first year and +75% over two years.
The future of cars (and it's not Cars 4)
Laura Berry in Cars Guide, wrote an interesting article on where cars will be manufactured in the future.
The brief history
It used to be the US that pioneered the manufacturing of large volumes of cars, and then Europe, which developed and refined the US concept.
Post war, Japan started to take a foothold in the industry, starting at the cheap end then slowly building up to quality products we all grew up to know and love – Toyota, Mazda, Mitsubishi and Nissan.
In the 2000’s, Korea stepped up and has rapidly increased its market share via Hyundai and Kia pushed by their foray into SUVs and Electric Vehicles.
China arrives
Then Wooosh! China arrived in a hurry, building state-of-the-art, sophisticated cars in large volumes – primarily in the Electric Vehicle (EV) and Hybrid markets. Hybrids have an EV and ICEV under their hood (ICEV: Internal Combustion Engine Vehicle – petrol or diesel).
Largely driven by its own domestic demand as the living standards for many of its people have been rising, China’s long term strategic investment in all things electric is starting to pay off. Big time.
Chinese car manufacturers are rapidly advancing in production speed, developing new platforms and technology, benefiting from low battery costs and electronics availability, and achieving breakthroughs in charging systems. Supported by substantial financial backing and government support in China, these factors collectively create formidable competition for many other brands.
Laura says “At the end of 2024 there were 12 Chinese brands operating in Australia and this year we’re expecting at least another seven to arrive. To put that in perspective we currently have a total of 50 car brands in Australia and nine are Japanese. By the end of 2025 the Chinese tally could easily be 20 brands or 30% of Australia’s brand make up.”
She goes on to say “BYD, Zeekr, Leapmotor, Geely, Deepal, XPeng, Smart, JAC, Aion, Chery and Jaecoo will spend 2025 launching a multitude of new vehicles here. BYD will be one to watch having sold more cars here last year than Mercedes-Benz and it will likely enter the top 10 best sellers next year. Geely, which is the ‘Volkswagen of China’ in terms of its size and how many brands it owns, is another to watch.”
As with any rapid change, there may be some fall-out.
- Some Chinese brands may struggle to establish themselves in Australia and could eventually withdraw from the market as well.
- It is highly likely that some established brands will exit the Australian market, unable to compete with Chinese counterparts.
Nevertheless, it is also plausible that within the next decade, Chinese brands could comprise more than half of the Australian automotive market.
ATO debt defaults & business failures
As reported by Jeanine Purdie, CEO of Business Credit Solutions & Repaid Collections.
Since April 2022, the ATO has disclosed business tax debts to credit reporting bureaux, such as CreditorWatch, under specific conditions: the debt exceeds $100,000 and is over 90 days overdue AND the business has not responded to two attempts to be contacted by the ATO.
Jeanine quoted Patrick Coghlan, CreditorWatch: “31% of private businesses with ATO tax debt defaults — defined as debts exceeding $100,000 that are over 90 days overdue—have either become insolvent or voluntarily closed during the past year.”
Industries particularly hard hit by defaults in tax payments resulting in insolvency were:
- Electricity, gas, water and waste services: 52% of defaults
- Information, media and communication: 47%
- Mining: 42%
- Food: 41%
- Retail: 36%
Lenders Offering LMI Waivers To Some Essential Workers
Many home loan customers are required to pay lender’s mortgage insurance (LMI) if they have less than a 20% deposit. However, exceptions exist for certain professions.
Some lenders offer LMI waivers for essential workers, such as police officers, firefighters, nurses, and paramedics, allowing them to purchase property with a deposit smaller than 20%. Other lenders provide special deals for high-income or reliable workers, including medical professionals, lawyers, accountants, engineers, IT professionals, and pilots.
Taking out a low-deposit loan with an LMI waiver offers two main benefits: you can avoid paying LMI (which can exceed $10,000) and potentially buy a property sooner, saving money in a rising market. For example, in 2024, median house prices in Perth increased by $140,000, and in Brisbane, by $95,000, according to the Australian Bureau of Statistics.
LMI rules differ between lenders, so if you’re thinking about buying a property, get in touch with me. By understanding your profession and financial situation, I can provide a shortlist of lenders who are interested in working with people like you.
High LVR loans – good or bad for you?
But when you can’t avoid LMI, is it worthwhile to get a high LVR loan? Like all good questions, the answer depends.
Let’s look at a few issues to consider:
- High LVR loans come with a higher interest rate and more than likely, LMI – an insurance premium paid by the borrower to protect the lender.
This is bad, right?
Well, if the loan is affordable (an absolute must for any loan – and not negotiable), and it gets you into a property which appreciates in value, then the maths might say ‘the cost is less than the gain’.
So as with all things, paying a higher rate and paying LMI might allow you to make more money than if you didn’t take out the loan. Helia, one of the major LMI providers, has collated data which shows that properties purchased using Helia’s research shows that for the 5 year period between 2014 and 2019, across all Australian States and Territories, the equity increased by $107K over that period. And during this period, the median house prices increased by $341K (from $474K to $815K), so being able to participate in at least part of that increase is probably a good thing for those home buyers.
More Vendors Listing Their Home For Sale
As more properties hit the market, buyers gain more choice, leading to reduced competition and increased bargaining power. And that’s exactly what’s happening right now.
In February, 249,325 homes were listed for sale across Australia, according to SQM Research. This marked a 2.3% increase from the previous month and a 4.1% rise compared to the same time last year.
At the same time, the number of new listings—properties on the market for less than 30 days—reached 76,159 in February. This was a 43.6% jump from the previous month and a 2.0% increase compared to the same month last year.
This means buyers in many areas are in a stronger position compared to last year, although the market is still favourable for sellers in many respects.
Regardless of whether you’re in a buyer’s, seller’s, or neutral market, one key strategy to strengthen your negotiating position is to get pre-approved for a loan before you start house hunting. Sellers typically prefer buyers who have their finances in order and can move quickly.
How To Increase The Value Of Your Property
Last month, I provided 5 better than good reasons to prepare your property for sale, courtesy of Susan Peter-Budge, 3Two Projects.
This month, I have identified five ways to increase equity in your property without undertaking a major renovation.
1. Modernise your kitchen and bathrooms
These key areas can have a big impact, so even small updates—such as new benchtops or lighting—can make a noticeable difference.
2. Maximise space and light
Adding mirrors, installing skylights, and removing non-structural walls can make your home feel larger and more open.
3. Increase your kerb appeal
Painting the exterior, upgrading the garden, and installing a modern front door can enhance the attractiveness of your home to both valuers and buyers.
4. Improve your energy efficiency
Installing solar panels, better insulation, and energy-efficient appliances can reduce your home’s running costs, increasing its value in the process.
5. Make strategic additions
Adding practical features like a home office, outdoor entertaining area, or extra storage space can appeal to potential buyers.
Before making any changes, it’s wise to research local property trends to ensure your improvements align with the preferences of your market.
RBA Keeping Eagle Eye On Inflation
Pay close attention to inflation if you’re curious about the direction of interest rates in 2025. The Reserve Bank of Australia (RBA) has closely tied its decisions on the cash rate to inflation trends over the past three years.
In 2022 and 2023, as inflation escalated, the RBA began raising the cash rate to curb economic activity and alleviate price pressures. Throughout 2024, the RBA maintained the cash rate steady, balancing concerns of lingering high inflation against insufficient grounds for rate cuts. However, in February 2025, the RBA opted to lower the cash rate from 4.35% to 4.10%, citing significant progress in inflation reduction, as indicated in the meeting minutes.
The RBA aims to keep annual inflation between 2-3%. In January, inflation came in at 2.5%, which was the sixth consecutive month it had been within the RBA’s target range, according to the Australian Bureau of Statistics.
However, the RBA has forecast that inflation will rise to 3.7% by the end of 2025, before falling to 2.8% by the end of 2026.
This would suggest that a further rate decrease might not be that close after all…..
