A rate hike in February could cause \u201chuge financial losses\u201d for many Australians as a 0.25 per cent rise will result in mortgage stress for 1.3 million households.<\/p>\n
The Reserve Bank of Australia may be forced to lift the cash rate 0.25 per cent next month after unemployment fell to 4.1 per cent<\/a> and inflation remains above the central bank\u2019s target band at 3.4 per cent<\/a>.<\/p>\n Money markets predict there is a 59 per cent chance the rate will lift, a solid jump from the 28 per cent chance prior to Thursday\u2019s data being released.<\/p>\n A hike will bring pain to Aussie homeowners who only recently got some mortgage relief, according to Aaron Scott the co-founder of real estate agent comparison service bRight Agent.<\/p>\n He pointed to a Roy Morgan report which showed the number of mortgages deemed \u201cat risk\u201d will lift by 41,000 from about 1.25 million.<\/p>\n “There will be around 1.3 million Aussie mortgage holders at risk of mortgage stress if the RBA hikes in February according to new Roy Morgan research,” Mr Scott said.\u00a0<\/p>\n \u201cIf even a fraction of those people\u00a0are forced to sell because they can’t meet repayments, then you’re going to see a wobbly housing market and huge financial losses right around the country.”<\/p>\n He cited Cotality data which showed there were signs of weakness across the property market in capital cities, while smaller capitals showed signs of slowing growth.<\/p>\n “I think homeowners and property investors will be waiting with bated breath when the RBA delivers its decision next week,” Mr Scott said.<\/p>\n “In a 2026 worst case scenario, you’ll see a lot of people losing money – through higher interest rates, an inability to pass on higher rents, and potentially job losses too.”<\/p>\n After the unemployment data was published on Thursday, AMP chief economist Shane Oliver said the rise had fuelled concerns of a rate hike but noted the key piece of data to look out for is next week’s inflation numbers.<\/p>\n “At the margin, (the new unemployment figure) does increase the chance of a hike in February,” Mr Oliver told Sky News.<\/p>\n “But obviously, the inflation numbers that come out next week will be the key factor in that.”<\/p>\n VanEck’s head of investments and capital markets Russel Chesler similarly argued the data pushed the case for a rate hike.<\/p>\n \u201cWe\u2019re now closer to an RBA rate rise,” Mr Chesler said.<\/p>\n “While it\u2019s good news that Australians are fully employed, this is another indicator of a robust economy and inflation levels that are still too high for the RBA.<\/p>\n \u201cMarkets are currently pricing in a 25 basis point rate increase by August 2025. While we don\u2019t think the RBA will move in February, a rate hike in March or May is not off the cards.”<\/p>\n Commonwealth Bank of Australia and NAB are both forecasting a rise in February, while the latter is also expecting another hike in May.<\/p>\n ANZ and Westpac, however, both predict the cash rate will remain steady during 2026.<\/p>\n","protected":false},"excerpt":{"rendered":"A rate hike in February could cause \u201chuge financial losses\u201d for many Australians as a 0.25 per cent…\n","protected":false},"author":2,"featured_media":431643,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,14821,164,5465,5626,21131,7054,183,47714,4847],"class_list":["post-431642","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-cash-rate","tag-economy","tag-inflation","tag-interest-rates","tag-mortgage","tag-rba","tag-reserve-bank-of-australia","tag-sky-news","tag-unemployment"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/431642","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=431642"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/431642\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/431643"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=431642"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=431642"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=431642"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}