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Northern Rivers Local News

Anticipated Interest Rate Decline Under New RBA Governor

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Anticipated Interest Rate Decline Under New RBA Governor
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Anticipated Interest Rate Decline Under New RBA Governor

In approximately two months, when Michele Bullock assumes her role as the incoming Reserve Bank governor, borrowers might have already witnessed the last increase in interest rates. Rather than continuing with rate hikes, her leadership is expected to initiate a new cycle, with forecasts suggesting that Ms. Bullock will likely implement interest rate cuts shortly after taking charge.
Despite previous rate hikes, home prices have continued to rise. However, some relief may be in sight for borrowers, as certain economists predict that the cash rate will likely return to the low 3s by the end of 2024. This should provide some respite to borrowers who have experienced nearly a 60% increase in their monthly repayments since May 2022.
The announcement of Ms. Bullock’s appointment as the successor to the current RBA governor, Philip Lowe, came from Prime Minister Anthony Albanese and Treasurer Jim Chalmers. Philip Lowe is known for leading the fastest tightening cycle in a generation, having raised the cash rate by 4 percentage points in just 13 months. Nevertheless, economists speculate that the major work in this regard might already be accomplished by the time Ms. Bullock assumes her position.
The recent minutes of the July RBA meeting indicated a close decision to maintain the cash rate at 4.1%. The board considered both a pause and a 25-basis point increase but ultimately decided to keep the rate steady until the August meeting when they will reassess the situation. The RBA acknowledged that further tightening might be necessary to bring inflation back to target, but it will depend on the evolution of the economy and inflation.
Economists hold varying opinions on the future path of interest rates. While some expect one or two more rate hikes in August and September, followed by cuts in the next year, others anticipate earlier rate cuts, possibly beginning as soon as February. Leading economists from ANZ, Westpac, CBA, and NAB offer different perspectives on the expected cash rate, ranging from low 3s to 3.1% by the end of 2024.
For borrowers with variable home loans, the recent rate hikes have led to significant financial impacts. If the predicted rate cut to 3.1% occurs next year, it could save borrowers hundreds of dollars per month on their mortgage repayments, providing some relief from the current financial strain. However, the RBA minutes also caution that mortgage interest payments are already at a record high of 9.4% of income and may continue to rise, even without further interest rate hikes, as fixed-rate loans transition to higher variable rates.
While the rate hikes appear to be influencing various aspects of the economy, there are still potential impacts to come from interest rates. The high proportion of fixed-rate mortgages has caused a delay in the full impact of the rate changes. As approximately 800,000 fixed-rate home loans are set to expire in 2023, the transition to higher interest rates could affect borrowers further. Nevertheless, economists believe that the rate decisions have already started to affect consumer spending, business conditions, and inflation, with more impacts likely in the future.
In summary, under the new RBA governor Michele Bullock, interest rates are expected to decline, potentially bringing relief to borrowers facing increased mortgage repayments in recent times. Economists offer differing opinions on the future path of interest rates, but the RBA remains vigilant in assessing economic developments to determine the best course of action.

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Northern Rivers Local News

The Northern Rivers Times Newspaper Edition 224

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The Northern Rivers Times Newspaper Edition 224
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The Northern Rivers Times Newspaper Edition 224

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The latest edition of The Northern Rivers Times available from all newsagents, Woolworths Supermarkets, General and Rural Stores as well as Ampol Foodary and select service stations from Coffs Harbour through to Coolangatta and every town in between.

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Evans Head News

Council decides not to appeal Iron Gates ruling

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Council decides not to appeal Iron Gates ruling

At its first ordinary meeting of the new term, Richmond Valley Council has formally decided not to proceed with an appeal against the NSW Land and Environment Court’s ruling on the Iron Gates subdivision proposal at Evans Head. The original ruling, made on 31 July, favoured Goldcoral Pty Ltd, granting approval for the contentious development.

The prior Council had lodged a Notice of Intention to Appeal to preserve the right to challenge the court’s decision. This measure was taken to allow the newly elected councillors an opportunity to thoroughly review the legal advice and consider whether an appeal would be warranted.

General Manager Vaughan Macdonald

General Manager Vaughan Macdonald

General Manager Vaughan Macdonald explained that, following detailed deliberation and expert legal advice, the Council determined that pursuing an appeal would not serve the best interests of the community nor be a responsible use of resources.

“Independent legal advice from Senior Counsel Jason Lazarus concluded that an appeal would not have reasonable prospects of success under s57(1) of the Land and Environment Court Act 1979,” Mr. Macdonald said. “The only grounds for appeal would involve errors of law under the Act, and even if the appeal were successful, it would not necessarily prevent future development on the site.”

Mr. Macdonald expressed the Council’s disappointment with the court’s decision but emphasized that the focus should now shift to ensuring that any future development aligns with the community’s long-term vision and needs.

“Council believes that our resources are better spent working towards ensuring the development is carried out in a way that reflects our community’s goals, rather than engaging in an appeal that could still result in development on the site,” he said.

With the decision not to appeal, the Council will now focus on engaging with the developer and relevant stakeholders to ensure that the project is executed responsibly. This includes enforcing compliance with environmental regulations, ensuring alignment with infrastructure plans, and integrating community feedback throughout the process.

Mr. Macdonald also mentioned that Council is exploring the possibility of levying charges on future residents to cover the additional maintenance costs that may arise as a result of the development.

“We are committed to advocating for the best outcomes for all residents,” Mr. Macdonald added. “This includes maintaining open communication with the developer and addressing community concerns as the project progresses.”

The Council’s decision not to appeal reflects a pragmatic approach to balancing legal realities with the broader goal of managing development in a way that serves the interests of the Richmond Valley community.

 

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Ballina Shire News

Temporary Road Closures Byron St and Ross St, Lennox Head

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Temporary Road Closures This Thursday and Friday – Byron St and Ross St, Lennox Head

Ballina Shire Council advises of temporary road closures in Lennox Head for essential roadworks this week.

  • Thursday, 24 October: Byron St will be closed between Gibbon St and Park Lane from 9am to 3pm for heavy patching and asphalt overlay repairs. Work will begin at 7am, with detours via Lennox Street and Pacific Parade during the closure.
  • Friday, 25 October: Ross Street will be closed from 7am to midday for similar repair works.

Traffic control will be in place at both locations, and motorists and pedestrians are asked to follow all safety signs and directions. Local residents will be assisted with access during the closures.

For live traffic updates and scheduled works, visit www.livetraffic.com.au.

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