Media Release | Monthly Consumer Price Index Statement – Oliver Hume

29 Jul

min read

Content & Social Manager

Lilly Mackay

Media Release | Monthly Consumer Price Index Statement – Oliver Hume

29 Jul 2026

min read

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.

Given all the global surprises encountered in the first half of 2026, it seems hard to believe that the underlying inflation pulse is easing, but that’s what today’s inflation release is telling us.

The result came in slightly below market forecasts in both headline and underlying terms. Headline inflation eased from 4% to 3.8% and underlying inflation was steady at 3.6% but only running at 3.2% over the last 6 months. Both were below market consensus of 4% for headline and 3.7% for underlying. Only a few months ago, expectations were for headline inflation to push to 6% and underlying by 4.5% by the end of the year.

Inflation outcomes have consistently surprised on the downside for the past three months.

The chances of one more rate increase have varied wildly over the last month from well below 50% to being nearly a sure thing according to financial markets. Most economists surveyed in early July thought the RBA would hold at 4.35% until the second half of 2027 when cuts would be coming.

Prior to today’s result, the market had priced in a 78% chance of a 0.25% hike by the end of the year, and fully priced in by March 2027. The chance of a move up at the August meeting had peaked around 40% before falling back to ~25% before today’s release.

Today’s inflation result probably shifts the balance back to a longer period of the RBA holding on rates before the next move down occurs sometime in the second half of 2027.

This is good news for residential markets already dealing with the fallout from the three previous hikes in February, March and May and Federal Budget uncertainty.

The market is clearly cooling, 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.