Elite Agent | Rate Rise: Inflation Hits 4.6% as Housing Drives Pressure on RBA Policy

Oliver Hume Property Group Chief Economist Matt Bell features in Elite Agent's expert roundup responding to the RBA's decision to lift the cash rate back to 4.35% — effectively reversing the three cuts delivered in early 2025 — as headline inflation climbed to 4.6% over the year to March.

Bell noted that markets had priced in approximately a 70% chance of the hike ahead of the decision, with all four major banks forecasting the increase. He observed that forecasts for the remainder of 2026 remain divided, with Westpac anticipating two further hikes while the other three big banks consider this the last move of the cycle.

On the property market outlook, Bell's assessment was more measured than some. Early indicators, he said, were not as dire as initially feared — with strong price growth continuing in Perth, Brisbane and Adelaide, and price rises holding in Melbourne's and Sydney's most affordable suburbs even as broader conditions ease. Auction clearance rates and consumer sentiment had also recovered off the lows recorded at the onset of the Middle East crisis, new home sales rose in March, and unemployment remained at historically low levels.

Bell's overall view was that a stabilisation in rate expectations — rather than further hikes — would be the key to settling the market, with a return to more normal activity anticipated in late 2026 or into 2027.

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