Why is it taking so long for rates to reduce?

It is this holding pattern which is a killer. Every day, you hope for some good news. Any news. Preferably not bad news. And this is indeed true for many buyers, sellers and home loan customers right now.

For the best part of this year, many people who have a variable rate home loan are waiting for their bank to signal that interest rates - and therefore their repayments - are being cut.

For those looking to buy into the market, it is the hope that reduced rates will help them to be able to borrow more to get into the market.

And for sellers, it is the hope that reduced rates will bring buyers out in droves. particularly here in Melbourne.

Whatever side of the fence you are sitting on. we are all waiting.

It is true that Australia is one of the last remaining countries to start seeing the cash rate reduce. In September, the US Federal Reserve announced that it was reducing the cash rate by a whopping 0.50%. This month, NZ announced it's second cash rate reduction in as many months, matching the 0.50% cut we saw in the US. Canada, has also reduced. And the list goes on.

Yet, here in Australia, we continue the agonising wait. With unemployment continuing to hover around 4% as it has done for more than 6 months, and CPI proving to be increasingly stubborn, to this point we are still yet to see the RBA change it's tune around the hope of rate cuts in the 'near term'.

It can almost feel like we are the chosen ones her in Australia. Admittedly, many countries around the world are starting from a higher level from which to reduce their cash rate. However, the wait has been long. It has been 10 months since the was a change to the cash rate by the RBA, the last coming Melbourne Cup in 2023.

The next CPI Inflation figure is due out 30th October. With only 2 RBA meetings left between now and Christmas, time is of the essence.

Watch this space.