Investors update - Dec 2024 edition

As we step into 2025, it’s important to reflect on the recent market trends and how they may shape your investments with ASCF moving forward.

In Australia, the Reserve Bank has held interest rates steady to manage inflation, keeping lending conditions tight.?

Moving forward we expect the RBA to reduce rates by 0.25% in February followed by a further 0.25% by June lowering the cash rate to 3.85%.?

Any further reductions in late 2025 will remain data dependant but with the December 2024 quarter core inflation expected to be close to within the RBA range of 2% to 3% we believe employment data will determine whether further rate cuts eventuate.

At this stage ASCF’s internal view is that we are unlikely to see more than two rate cuts from the RBA in 2025 of 0.25% each however we consider this sufficient to cushion the property market from any sort of deterioration in pricing.

Whilst a weaker Australian dollar heading into 2025 will support exports, it will also drive investment into the county in particular into property from overseas investors.

Imports and the cost of construction materials may increase slightly but we expect wage growth to remain subdued which will bring stability to to construction prices.

Overall we are confident 2025 will be a positive year for the Australian economy driven by lower interest rates, steady employment and and stable inflation all of which will underpin residential property prices.

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