Another cash rate hold will come as a relief to mortgage holders, but the possibility of future increases still has some buyers seeking out certainty.
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The Reserve Bank decided to pause the official cash rate at 4.1 per cent on Tuesday, in an move expected by most economists and experts.
After saving for a deposit for about six years, 34-year-old Lauren Neale bought her first home in Canberra's Molonglo Valley in late July.
![First home buyer Lauren Neale chose a fixed rate to give her some certainty over future cash rate changes. Picture by Sitthixay Ditthavong First home buyer Lauren Neale chose a fixed rate to give her some certainty over future cash rate changes. Picture by Sitthixay Ditthavong](/images/transform/v1/crop/frm/146508744/444d24a7-1b81-4e75-8d9d-2b47308f0a8f.jpg/r0_281_5500_3385_w1200_h678_fmax.jpg)
As Ms Neale planned her first property purchase, the rate at which interest rates had risen since May 2022 was "very daunting".
It was only a few weeks ago she was looking at an interest rate of 6.25 per cent with her bank.
"In the time it took for all the paperwork and everything to go through it had moved up to 6.59 [per cent]," she said.
"It sounds like a small jump but it feels quite significant."
The uncertainty of future cash rate movements led Ms Neale to opt for a fixed interest rate, which she locked in for a couple of years.
The fixed rate gave her some peace of mind for Tuesday's rates decision, but she would be keeping an eye on future cash rate changes.
"If they start to dip back down again, that would be a welcome sign to see," she said.
Many other buyers, however, were opting for variable rates, a recent Australian Bureau of Statistics report showed.
The value of variable rate loans taken out was close to an all-time high of $50.5 billion in June, while the value of fixed rate loans were less than a tenth of that.
ABS lending data also showed the number of new loans taken out by first home buyers in the ACT fell 0.5 per cent in June.
At the national level, first home buyer loans fell 0.8 per cent to 8239, following a 2.7 per cent rise in May. It was 12.2 per cent lower compared to a year ago.
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Canberra real estate agent Ankit Karwar from Mainstream Real Estate, who sold Ms Neale her first home, said Tuesday's cash rate pause would be a relief for both sellers and buyers.
Mr Karwar said the previous rate rises had constrained borrowing capacity for some Canberra buyers, who were "a little reluctant" to purchase right now.
"Some of the buyers, those who even have got pre-approval, they are also reluctant to go ahead and actually commit to a property," he said.
He said first home buyers in particular may look to rent for longer if interest rates rise further this year.
Further rises a possibility
More than two-thirds of the 43 experts and economists surveyed by comparison website Finder had expected the cash rate to hold in August.
In its July home value index, property data firm CoreLogic stated it was "increasingly likely" the interest rate cycle was at or near a peak.
A drop in inflation over the June quarter should help to lift consumer spirits, and spending on housing, the report noted.
"However, we don't expect to see a material lift in purchasing activity until interest rates start to reduce, which isn't likely until 2024," the home value index stated.
Following the announcement on Tuesday, CoreLogic research director Tim Lawless said the cash rate hold would be welcome reprieve but it wasn't a guarantee the rate hiking cycle was over.
"Considering the RBA is working with a mixed bag of key data sets that guide their decision making, another rate hike down the track remains a possibility," he said.
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