June 2025 quarter
Dr Nicola Powell
Chief of Research and Economics
The RBA surprised markets by holding the cash rate at 3.85%, opting for proof over promise. While economic growth is slow and retail volumes are weak, they want clearer confirmation that inflation will remain within target before easing monetary policy again. The hold buys time to test June-quarter inflation and jobs figures. Even without a July move, lower rates have already boosted household borrowing power by about 5% and that additional capacity is translating directly into stronger demand: Sydney’s clearance rate is at its highest in 11 months. That extra capacity is one reason Domain expects house prices to rise by 7% and unit prices by 6% in FY26. If the next data batch confirms the disinflation trend, an August rate cut would add fresh fuel to demand – and to prices – well before the spring selling season.
