RBA Leaves Rates on Hold as Inflation Persists
Market ANALYSIS & OpINION
Loan Market Excel Finance Broker Adam Wallace-Harrison explores the Reserve Bank of Australia’s latest decision to hold rates.
Yep, the Reserve Bank of Australia (RBA) decided to hit the snooze button on interest rates again, keeping the cash rate steady at 4.35%. Why? Simple – inflation is proving to be a tough cookie. Even though headline inflation dropped (thanks mostly to a temporary break on power bills), the underlying numbers are still too hot for the RBA’s liking.
So, what’s actually happening?
The big drop in “headline” inflation was mainly due to temporary rebates on electricity bills – a bit of a quick fix, not a real long-term change. When you strip away those kinds of temporary measures, inflation is still stubbornly above the target range. That’s why the RBA isn’t in any rush to lower rates, my thoughts are we won’t see a shift until at least early 2026.
But interestingly, even with rates staying high, people are still out there buying homes. In fact, more Aussies are taking the plunge on their next home, with a 21% jump in people upsizing or relocating compared to last year. The property market is still buzzing, which is probably another reason the RBA’s holding firm.
The RBA’s got one more cash rate decision to make in December before they break for the summer. But here’s the truth: you don’t have to hang on every rate decision to get ahead. If it’s been a couple of years since you locked in your loan, it’s probably time for a home loan health check. There are plenty of decent deals out there right now, so don’t wait around for the RBA to cut rates to start saving. A little shopping around could mean more cash in your pocket right now – and that’s something we can all enjoy coming into the festive season.
To get in touch with Adam call 1300 003 414, email excel@loanmarket.com.au or click here.
