Expert panel predicts rates will remain on hold longer

Experts normally have sound advice for struggling Aussies. This one threw all that out the window ahead of the RBA’s next rates decision.

If you were wondering if there was any uncertainty in our economy right now, look no further than Finder’s latest RBA survey.

While being asked to predict rate movements in 2025, a panel of 40 economists and experts were also asked for their one piece of economic advice for the year ahead.

“Pray”, was the single word response from Richard Holden of UNSW.

Economists and desperate religious implorations don’t often go hand-in-hand. Why this advice?

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“Core inflation is too high and the RBA didn’t raise rates enough,” Holden explained, while predicting the RBA would hold rates until September next year.

Economist Professor Richard Holden suggests borrowers may need to turn to the heavens for help. Picture: John Appleyard

The advice from AMP’s Shane Oliver: “If you have a big mortgage, pay it down as quickly as you can.”

“Pay your debt off ASAP,” agreed Jakob Madsen of the University of Western Australia.

“Expect the unexpected”, warned James Morley of the University of Sydney.

With a clear theme of uncertainty for borrowers, some suggested other investment classes.

“Invest in the stock market now,” said Dale Gillham of Wealth Within.

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“Diversify your investments, including super,” said Stephen Miller of GSFM.

“Move to cash,” said Garry Barrett of University of Sydney.

AMP Chief Economist Dr Shane Oliver suggests paying down debt. Picture: John Appleyard

But, warns Monash University’s Mark Crosby, “don’t buy crypto. It’s a bubble.”

Overall, 49 per cent of those surveyed believed the first rate cut of 2025 would be in May, while a further 24 per cent believed it would come even later in 2025.

Eight out of the 40 surveyed believed rates would be cut in February.

The predictions make bleak news for the Aussie households struggling to make mortgage payments. It comes as the latest SQM research data this week revealed distressed listings rose by 1.7 per cent across the country over the past month, indicating more households are facing being forced to sell their homes.

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South Australia had a 12.9 per cent rise in distressed listings, while WA (5.5 per cent) and NSW (3.8 per cent) were also significant.

Household budgets are under significant pressure this year.

It’s no secret that households are being placed under significant pressure by the cost of living crisis, according to Finder’s head of consumer research Graham Cooke.

“Young Australians, particularly those renting, paying off a mortgage, or raising children are feeling the strain most acutely,” Cooke said. “The good news is that Australians could see a rate cut this financial year. Most experts on our panel expect the first cut to occur within the first three meetings of next year.”

Originally published as Expert panel predicts rates will remain on hold longer