Considering Standard Variable Rates with the "big four" are still currently around 6.7%, I cannot see rates falling below 5%.
So although I would like rates to fall much lower than that level, I really don't think economic conditions in Australia will warrant it. That is, the downturn will not be too severe, but will probably last longer than most people realise.
My forecast: Standard Variable Rates with the "big four" will bottom around 5% towards the end of 2009.
But bear in mind, most investors are not paying the Standard Variable Rate, for example, my Variable Rate with the CBA is 5.84% (0.9% discount).
