The Friday Wrap - 28 November 2025

Inflation Spike Ends Rate-Cut Hopes as Lending Rules Tighten and Auction Activity Softens

Good afternoon,

A few key data and policy releases are out this week, impacting property markets highlighted below. Next week is the typical big first week of a new month, with Cotality property prices and some key ABS releases like GDP and Building Approvals.

Highlights of the week:

• October inflation data came in higher than RBA and market expectations, essentially killing any chance of a rate cut unless we see some big surprises in future inflation or unemployment data.

• Before the data was released, the market had just under a 50% chance of one more rate cut in the cycle being delivered at the May 2026 meeting.  Within half an hour of the release, that number had fallen to below 30%, and it now sits at 0%.  That is, the market thinks the rate-cutting cycle is now over.

• The other big property-related news of the week was APRA imposing limits on lenders as to how many high-debt-to-income loans they can hold.  Critically, it excludes lending for the purchase and construction of new homes to avoid impacting the new housing supply.

• Auction clearance rates slipped last weekend, both in volume and clearance rate terms. It was the first time in 24 weeks that the preliminary clearance rate fell below 70% (Melbourne's rate was 69.7%).

Have a great weekend!

Chief Economist

Matt Bell