People with home loans could be set to benefit from cheaper payments next year, with ANZ predicting the Reserve Bank of Australia (RBA) will make more interest rate cuts.
The big four bank said the RBA will reduce the key cash rate by a full percentage point, bringing it to an all-time low of two per cent, a factor that could have an impact on people who own real estate.
According to ANZ, the central bank will be forced into the decision as the Australian economy suffers a series of setbacks and troubling developments.
Chief economist at the financial institution Warren Hogan said on Twitter: "We now expect the RBA to cut by 25 basis points in each quarter of next year."
In a forecast report, ANZ noted: "The key issue for markets and policy makers is whether the weakest sectors of the economy (ie retail, housing, manufacturing and non-residential investment) strengthen sufficiently to offset the anticipated slowing in mining investment."
Interest rates have dropped a number of times in 2012, including a 0.5 percentage point fall in May and 0.25 percentage point reductions in June, October and December.
And ANZ believes a range of factors will affect the economy in the near future, such as deterioration in job advertising trends, the strong Australian dollar and weakening business conditions – particularly in resourcing.
