Media Release | Monthly Consumer Price Index Statement – Oliver Hume

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

For the first time in three months, today’s July inflation data surprised the market to the upside. Inflation outcomes have consistently surprised on the downside for the previous 3 months, but both monthly headline and trimmed mean inflation were higher than forecast. Trimmed mean inflation printed at 0.5%, bringing annual underlying inflation to 3.6%, above both RBA and market expectations.

This morning also saw the release of the Minutes of the RBA Board meeting on 11th August where they held the cash rate steady. The minutes clearly showed a Board concerned with potential for inflation to increase in the second half of the year and willing to raise rates at the first sign of this.

Prior to today’s inflation release, chances of another hike in September sat below 30%. Today’s result combined with the RBA Board Meeting Minutes will increase the odds of a hike in September, or at least by the end of the year.

Our base case remains a longer period of the RBA holding on rates before the next move down occurs sometime in the second half of 2027, but the risk to this has clearly shifted higher.

The housing market is in the middle of the softening cycle brought on by the three previous rate hikes, and likely will be until the outlook for rates stabilises, even if that doesn’t mean cuts for potentially 12 months. Once purchasers can lock in their borrowing capacity and budgets with some degree of certainty, markets will start to stabilise.

ENDS

Media enquiries and interview requests to:

Lilly Mackay

Oliver Hume

l.mackay@oliverhume.com.au

0437 899 949

or

Ben Ready

RGC Media & Mktng

ben@rgcmm.com.au

0415 743 838