Oliver Hume Comments on the RBA’s Latest Interest Rate Decision – December 2025

Today’s rate decision as outlined in Reserve Bank of Australia (RBA)’s December 2025 Media Release was essentially a non-starter with the market long ago deciding that the easing cycle was over and any real chance of a rise isn’t happening until closer to mid-2026.

The market had already priced in the end of the easing cycle, and any meaningful chance of a rate rise now looks pushed back until closer to mid-2026.

All eyes will now be on the RBA Governor’s media conference for any more guidance. Still, after that, we’ll be waiting on monthly inflation, unemployment, household spending, and quarterly GDP figures for a read on inflationary pressures.

What does the RBA’s decision mean for Australia’s property market?

On the plus side, established house price growth has been solid over the last few months at around 1% per month, and we’ve seen sales volumes and prices for vacant land increase across the country in the June and September quarters.

Supply remains low for many of these markets, and population growth remains strong. Credit remains readily available, especially for first home buyers and owner occupiers.

Households are also looking stronger, and are supported by:

• Rising consumer spending in the national accounts
• Increases in the monthly household spending indicator
• Consistent low unemployment

Auction rates and spring selling clearance

But we are seeing auction clearance rates ease below Spring long-term averages in the major capitals, and clearly inflation pressures remain as a negative influence on households.   And we know, the most substantial short term impact on property market activity is the direction and outlook for mortgage rates.

For my money, there are still more factors supporting underlying demand than detracting from it, and supply remains tight everywhere. The changed outlook for rates for 2026 has definitely dampened what was a very exuberant outlook, but we’re still expecting improvements in residential markets in 2026.

Sources

• Reserve Bank of Australia – December 2025 Monetary Policy Decision (link)