Following today's release of the monthly Consumer Price Index (CPI) by the ABS, the following statement can be attributed to Oliver Hume Chief Economist, Matt Bell.

Before today’s inflation data, the market had just under a 50% chance of one more rate cut in the cycle being delivered at the May 2026 meeting. Within half an hour of the release, that number had fallen to below 30%, with the market essentially removing any further rate cuts from the outlook.

The first complete monthly CPI release out today showed (seasonally adjusted) headline inflation rising 0.3%. It means annual inflation has risen to 3.9%, at the top end of market forecasts.

Underlying inflation now sits at 3.3%, above the RBA forecasts of 3.2% for the end of 2025 and through to June 2026. Essentially, far too high for the RBA to be comfortable with any rate cuts in the foreseeable future.

It means that this rate cut cycle looks like it will be 0.75% in total, the shallowest easing cycle in more than 30 years. So while we’ve already seen the three cuts to date drive a recovery in both established and land markets, the sugar hit normally provided by a deeper easing cycle won’t be as strong for 2026/27.

On the plus side, we do have continued strong underlying demand, rising consumer sentiment, households are in better and better shape, and we are still in the middle of a generational undersupply in new housing. These are all positive for further increases in property market activity and price.

2026 is still probably going to be a good one for property, both land and established housing markets, but today’s data has tempered the upside.

ENDS

Media enquiries to:

Mitchy Koper
Oliver Hume
M.koper@oliverhume.com.au 
0417 771 778

or

Ben Ready
RGC Media & Mktng
ben@rgcmm.com.au
0415 743 838