RBA Surprise Decision to Leave Cash Rate Unchanged

Oliver Hume Chief Economist Matthew Bell said the recovery in land sales we’ve seen in the last few months as a result of the first two RBA cuts was dealt a blow today as the RBA went against near unanimous market expectations of a 0.25% cut.

“Preliminary monthly land sales for May were the strongest of the year so far in Adelaide, in nearly 12 months in SEQ, and in over 3 years in Melbourne.

“Established dwelling prices have risen for 5 consecutive months and new home sales for the last quarter as well.

"The rate cuts expected today (along with expectations of further cuts in the next 12 months) has been a key part of strength of the last few months, and the uncertainty injected by today’s decision makes the outlook for the rest of 2025 a lot less certain.

“Existing mortgage holders would have been banking on the expected saving in mortgage payments and potential new entrants to the market on the increase in borrowing capacity a 0.25% fall in variable rates meant.

“Given global economic uncertainty and the benign inflation environment, it’s possible that an August cut is now locked in, but a lot will depend on the guidance provided by the RBA today and in the coming weeks (as well as the June quarter inflation print on July 30).”