The Friday Wrap, 12 December 2025

Australian Property Market Update – RBA Interest Rates, Jobs Data & Auction Results

This week’s Australian property market update was shaped by the Reserve Bank of Australia’s latest interest rate decision, fresh labour force data from the ABS, and continued softening in auction clearance rates across the capital cities. While the RBA held the cash rate steady, commentary around future policy settings, combined with weaker employment figures, has influenced interest rate expectations and provided new signals for housing market momentum heading into 2026. Below is a summary of the key economic and property market developments from the week.

Good afternoon,

The RBA's interest rate decision week was rather unexciting, and outside that, there were just a few key releases impacting property markets.

Highlights of the week:

• The RBA kept rates on hold, as expected by the market. The Statement was short and light on guidance, but the press conference afterwards was interpreted as hawkish, putting potential rate rises on the table as early as February 2026.
• Labour Force numbers released by the ABS on Thursday showed the national unemployment rate steady at 4.3%. However, it also showed a -21,000 decline in jobs, with only a decrease in the participation rate keeping the unemployment rate steady. This weaker result tempered rate rise expectations and supported those in the market predicting a long hold by the RBA rather than rate rises.
• Markets currently have a 0.25% interest rate rise fully priced in by June 2026, with a second by December. There is also a 50% chance of the first rise happening earlier in the year. There are still many forecasters expecting the RBA to hold rates through 2026 rather than increase them, and some prominent forecasters (Westpac) are still forecasting two more rate cuts, starting only in mid-2026.
• Auction clearance rates slipped again last weekend. The combined capitals preliminary auction clearance rate was down nearly 5 percentage points from the previous week to 63.5%. This was the third week in a row that the preliminary clearance rate has come in under 70%, pointing to some easing in the rate of established house price growth.

Have a great weekend!

Matt Bell

Chief Economist