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Official cash rate cuts may not necessarily drive a new housing boom
What underpins the OCR change and how might the housing market react?
AI summary
The Reserve Bank has cut the Official Cash Rate (OCR) as inflation nears its target and the economy weakens. This could see mortgage rates fall towards 5.5% by late 2025, potentially boosting short-term market sentiment.
However, a new housing boom is not guaranteed. A strong or lasting upturn may be restrained by several factors, including poor housing affordability, a high number of listings, rising unemployment, and the binding effect of new Debt-to-Income (DTI) ratio restrictions.
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