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Find out – in this special announcement brought to you by Legal Home Loans – if the Reserve Bank has again decided to keep the cash rate on hold, after keeping it at 4.35 per cent in June.
At its most recent meeting in June, the Reserve Bank of Australia determined, in a unanimous decision, to hold the cash rate at 4.35 per cent. This followed increases to the cash rate at its preceding three meetings.
Today (11 August), in a unanimous decision, the RBA board kept the cash rate at its current level.
In its statement, the board said: “The disruption to global oil supply is adding directly to inflation, and there are indications that higher fuel prices are being passed through to prices of other goods and services, so inflation is likely to remain high for some time. This inflation impulse is in addition to the effect of capacity pressures in the economy.
“The board remains focused on ensuring that high inflation does not become embedded. To achieve this, growth in aggregate demand needs to remain subdued to reduce capacity pressures and bring inflation back to target. Following three increases in the cash rate target since the beginning of the year, financial conditions are now tighter than they were, and the economy appears to be slowing as expected. But inflation is still too high.
“It is not expected to return to around the midpoint of the target range until late 2027, and there are upside risks to this projection. With monetary policy judged to be somewhat restrictive, the board decided to leave the cash rate target unchanged while it assesses how the economy is evolving. The board will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if upside risks materialise.
“Accordingly, the board will be attentive to the data and the evolving assessment of the outlook and risks to guide its decisions. Monetary policy is well placed to respond to developments, and the board is focused on its mandate to deliver price stability and full employment.”
In conversation with Lawyers Weekly, Legal Home Loans director of sales Cullen Haynes noted that all four major banks had forecast a hold at 4.35 per cent, with Westpac having dropped its “double 2026 hike” call within a day of the June CPI update, which saw headline inflation easing to 3.8 per cent (from 4 per cent), and annual trimmed mean inflation flat at 3.6 per cent. Both, he said, came in under RBA forecasts. Moreover, he continued, interbank futures priced a rate hike at a 4 per cent change, which was down sharply from mid-July predictions.
Ultimately, Haynes said, no major forecaster expects a rate cut before 2027.
Reflecting more broadly on the market, Haynes noted that property prices are already softening, with Cotality’s national Home Value Index having fallen 0.4 per cent in June, marking the sharpest monthly drop since December 2022, and the third straight monthly fall, with the June quarter down 1.3 per cent across the combined capitals.
“Sydney and Melbourne are leading the pullback, auction clearance rates have sat below 50 per cent since late May, and capital city sales volumes are running 16 per cent below year-ago levels,” he said.
“The smart legal professionals are moving early with pre-approval in hand to be ready to act on any bargains this correction throws up.”
Further, Haynes went on, lawyers should speak to a specialist broker, who can act as an “advocate in your corner”.
“Get pre-approved now. It costs nothing, lasts 90 days, and can be rolled over. It gives you the edge when dealing with agents, as vendors are looking for certainty, and your lower offer with a pre-approval may be looked upon more favourably than a higher offer (with no finance backing),” he said.
“The average residential rate we’re seeing sits between 5.9–6.5 per cent, depending on owner-occupied versus investment [properties]. If the cost of living has you questioning your rate, get in touch, and we’ll review your position. We currently have a $500 refinance campaign (lodge by 31 August) to assist with the cost of refinancing, which can be coupled with the Law Society rebate as well.”
