Why Did the RBA Keep Interest Rates Steady on Melbourne Cup Day?
Why Did the RBA Keep Interest Rates Steady on Melbourne Cup Day?
Q: What did the Reserve Bank of Australia (RBA) decide about interest rates ?
A: The RBA chose to keep the cash rate unchanged at 3.60% during its seventh monetary policy meeting of the year.
Q: Why was this decision expected?
A: Economists and major banks predicted the rate would stay the same after seeing higher inflation in the September quarter.
Q: What did the inflation data show?
A:
- The Consumer Price Index (CPI) rose to 3.2%, up from 2.1% in the June quarter.
- The trimmed mean inflation (a measure of underlying inflation) also rose to 3.0%, hitting the top of the RBA’s target range of 2–3%.
Q: What does this mean for interest rate cuts?
A: The RBA is being cautious. Rising inflation and strong household spending make it risky to cut rates too soon.
Q: What do experts say about the RBA’s decision?
A:
- Dr Nicola Powell (Domain): People are spending more, which helps the economy but also keeps inflation high.
- Eleanor Creagh (REA Group): The RBA wants clear signs that inflation is easing before making any cuts.
- Eva Loisance (Finni Mortgages): Holding rates helps keep mortgage repayments stable and supports property prices.
Q: How is the property market reacting?
A:
- Home prices are up 7.5% year-on-year.
- Confidence is growing, and demand is strong, especially with limited housing supply.
- Investors may focus on high-rent areas or add features like granny flats to boost returns.
Q: When might the RBA cut rates next?
A:
- Most major banks now expect the next rate cut to happen in 2026.
- CBA & Bendigo Bank: February 2026
- ANZ: Not before February 2026
- NAB: Possibly May 2026
Conclusion:
The RBA has kept interest rates steady, which means no big changes for now.
Prices are still rising, and buyers are staying active — but affordability is still a challenge.
- At Wakim Realty, we are here to help you understand what this means for your next move. Whether you are buying, selling, or investing, we will guide you through it with confidence.
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