RBA decision sparks property market buzz

The RBA’s decision to keep the cash rate unchanged was expected, as major banks and economists had predicted a hold following the latest consumer price index (CPI) data, unemployment data, and ongoing tensions in the Middle East.

PRD chief economist Dr Diaswati Mardiasmo said a cash rate hold was likely following three hikes in the first half of 2026.

She said the RBA’s decision to raise rates in May 2026 had been a surprise, as the central bank would typically pause around the federal budget period, but persistent inflation of 4.6 per cent in March ultimately prompted the hike.

“[This time] inflation rate has declined slightly to 4.2 per cent in April 2026, which provided confidence to the RBA to hold the cash rate,” Mardiasmo told REB.

Similarly, trimmed mean inflation was 3.4 per cent, up from 3.3 per cent in the 12 months to March 2026, remaining slightly higher than the RBA 2–3 per cent target.

Mardiasmo said the cash rate hold would give households greater certainty over their finances and mortgage repayments, provided lenders do not raise variable rates.

She said a stable cash rate would give buyers greater certainty and help boost demand, creating an opportunity for sellers who have been weighing up whether to sell or stay on the sidelines.

“Now is an ideal time to enter the market before any other potential cash rate hikes post-August.”

Similarly, principal at Finni Mortgages, Eva Loisance, said a rate hold would likely restore confidence to the market, with stronger sentiment driving activity and, in turn, placing upward pressure on property prices.

“A rate hold doesn’t make borrowing cheaper, but it does make buyers braver,” Loisance told REB.

“Sellers will read this as a green light, too. When vendors feel the worst is behind them, they stop discounting and start holding firm on price. That shift alone can change the tone of a market.”

She said that with chronic undersupply still unresolved, even a neutral RBA stance will be enough to keep property values as they are or even slowly grinding higher

According to Mardiasmo, investors have been “on-hold” due to the proposed federal budget changes on negative gearing and capital gains tax rules still being deliberated into legislation, with many waiting for the final outcomes to make their next property move.

“A stable cash rate will provide optimum conditions for investors while waiting, to ensure they are not making rash or forced decisions and optimising their investment strategy.”