Welcome to this month’s Dominion Finance Newsletter. We hope everyone is faring well with a warmer winter as we enter the last few weeks before Spring arrives.
With so much discussion around the RBA decision this week, the central bank after meeting yesterday and today has announced it will hold the current 12-year high cash rate at 4.35. This is good news for homeowners across the country.
Inflation is still stubbornly high, and part of today’s decision is to wait for government subsidies like the energy rebate and the Stage 3 tax cuts to kick in. We are by no means out of the woods yet, but it does look like we will keep our current interest rates a bit longer.
As of 1 July 2024, we all welcomed some tax cuts. These tax cuts are aimed to create more disposable income. While these cuts are poised to stimulate spending and economic growth, it is crucial to understand their potential implications, particularly concerning inflation and the housing market.
One crucial aspect of the housing market – is First Home Buyers. We need first home buyers stimulating our market from the bottom up so that existing home borrowers can sell, upsize, downsize, or move house to a preferred suburb or City.
At Dominion Finance we have welcomed these tax cuts, especially for the first home buyers. The tax cuts have meant that they can borrow a little bit more, giving them a bit stronger budget to go house hunting. An example of this with the new tax rates:
| New Tax Rates Single Person | Old Tax Rates Single Person | |
| Incomes | 70500 | 70,500 |
| Monthly Living Expenses | 1980 | 1980 |
| HECS debt | 41,000 | 41000 |
| AMOUNT CAN BORROW | 305,000 | 296,000 |
As always, we are here to help all homeowners navigate their finance needs and home loan products, including first home buyers with assisting their attaining exemptions on stamp duty and avoiding lenders mortgage insurance with first home buyer guarantees scheme placements. Until next time enjoy the change of season.
At its meeting today, the Board decided to leave the cash rate target unchanged at 4.35 per cent and the interest rate paid on Exchange Settlement balances unchanged at 4.25 per cent.
Inflation remains above target and is proving persistent. It has fallen substantially since its peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance. But inflation is still some way above the midpoint of the 2–3 per cent target range. In underlying terms, as represented by the trimmed mean, the CPI rose by 3.9 per cent over the year to the June quarter, broadly as forecast in the May Statement on Monetary Policy (SMP). But the latest numbers also demonstrate that inflation is proving persistent. In year-ended terms, underlying inflation has now been above the midpoint of the target for 11 consecutive quarters. And quarterly underlying CPI inflation has fallen very little over the past year.
The information provided in this newsletter is general in nature and does not take into account your personal circumstances, needs, objectives or financial situation. This information does not constitute financial advice. Before acting on any information in this newsletter, you should consider its appropriateness in relation to your personal situation.
