Elite Agent | RBA Pauses Cash Rate: Industry Leaders Weigh In on Housing Outlook and Buyer Confidence

What the RBA's Rate Hold Means for the Property Market

Catherine Nikas-Boulos of Elite Agent reports on the Reserve Bank of Australia's decision to hold the cash rate at 4.35 per cent, gathering commentary from industry economists on what the pause means for housing conditions. Oliver Hume Chief Economist Matt Bell provides market pricing on the rate outlook and his read on property fundamentals.

Interest Rate Expectations Into 2027

Bell said markets were assigning just under a 50 per cent chance of another 25-basis-point hike by December, rising to just over 50 per cent by March 2027, with cuts not expected until at least the second half of 2027. He noted the hold puts the market back at a familiar point since the last decision in early June, with a real possibility the cash rate has now peaked after reversing all of 2025's cuts.

Bell said the housing market fundamentals remain unchanged despite the hold, with demand continuing to exceed supply in most markets and household budgets in reasonable shape now that concern around the Federal Budget's tax changes for investors has largely settled.

Bell's Outlook for the Property Market

Bell pointed to consumer sentiment rising off recent lows and weekly auction clearance rates reaching 11-week highs, even as land market volumes were slightly down nationally in the June quarter and remained slow into July, with price growth in most markets still strong on the back of robust demand.

Bell said the outlook for the September quarter remains soft for both new and established markets, but with rates expected to stabilise through the remainder of 2026 and into 2027, he anticipates a return to the pre-downturn path of activity by early 2027.

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