Interest rates stay on hold – for now
The new-look RBA Board takes a careful middle road as mortgage holders continue to feel the pinch
2 min
Interest rates will stay on hold this month following a meeting of the RBA Board today.
In a widely anticipated move, the announcement comes despite an uptick in the rate of inflation in August, which saw a rise from 4.9 percent in July to 5.2 percent.
All four of the big banks predicted the official rate to remain steady at 4.1 percent for the October meeting, although NAB has forecast that a further 0.25 percent increase was still an option, possibly next month.
The board meeting was the first with Michele Bullock as governor, following the departure of Dr Philip Lowe last month. Dr Lowe was criticised for telling borrowers back in March 2021 that rates were ‘likely to remain at current levels’ until 2024. However, the RBA began raising the cash rate in May 2022 from 0.1 percent to 4.1 percent over a 12-month period in efforts to curb the rate of inflation.
Inflation peaked over the 12 months to December 2022 at 7.8 percent, well above target levels of between 2-3 percent.
CEO of the Real Estate Institute of NSW, Tim McKibbin, said despite the slight increase in inflation, it was important that rates remained on hold this month as the impact of earlier rate rises continues to play out.
“Until last week’s concerning CPI figures, which show the battle against inflation is far from over, it seemed a foregone conclusion that the new-look RBA Board would leave rates unchanged when it meets tomorrow,” he said.
“REINSW believes it is appropriate for rates to remain steady for at least the short-term.”
CoreLogic Research director Tim Lawless said the rate of rising home values had slowed over the past quarter as cost of living pressures kept a firm grip on household budgets.
He noted that the Board had sought a balance between supply and demand in the economy.
“Clearly inflation remains high on the RBA’s risk radar,” he said. “Higher fuel and energy prices, alongside persistently high services and rental inflation have the potential to trigger another rate hike later this year.
“Logically, the RBA will be waiting to see September quarter inflation data, released the week ahead of the RBA’s November meeting. With this in mind, the November meeting will be closely watched.”
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New research shows a widening divide across Australia and New Zealand’s property markets, with investors increasingly forced to look beyond traditional strongholds to find real returns.
3 min
By any traditional measure, Australia’s property market should be moving in sync. Instead, it is fragmenting.
New research from MaxCap, led by Head of Research Bruce Wan, paints a picture of a market no longer defined by national trends, but by sharp regional divergence, where performance gaps between cities are widening, and the smartest capital is moving accordingly.
At the top end of the ladder, Perth and southeast Queensland are surging ahead. At the other, Melbourne and Auckland are only just beginning to recover from recent downturns. And sitting squarely in the middle is Sydney, steady but constrained.
The takeaway is clear: the era of relying on headline markets is over.
The rise of the unexpected leaders
Brisbane and the broader southeast Queensland region have emerged as standout performers, driven by population growth, infrastructure investment and a sustained undersupply of housing.
According to the report, housing values in the region have continued to accelerate, supported by long-term tailwinds including the 2032 Olympic Games and a decade of relatively subdued price growth prior.
Perth is telling a similar story, albeit for different reasons. Once heavily tied to commodity cycles, the Western Australian capital is now benefiting from a broader base of economic drivers, including defence spending and sustained resource sector strength.
The result is a housing market that remains one of the strongest in the country, even as price growth begins to ease from its peak.
Sydney holds, but doesn’t lead
For Sydney, the story is more nuanced.
While prices continue to climb and the city remains Australia’s most expensive market, affordability constraints are clearly limiting its pace. Residential growth, while positive, lags behind smaller capitals, and commercial sectors are being held back by softer demand in key industries.
There are, however, signs of momentum building. New infrastructure, including the western Sydney Airport and expanded rail networks, is expected to unlock development opportunities and support future growth, particularly in emerging precincts.
Still, the report positions Sydney firmly in the “middle of the pack”, no longer the automatic frontrunner for investors.
Melbourne’s slow reset
Melbourne, once a consistent performer, has spent recent years recalibrating.
Extended lockdowns, combined with new state property taxes, have weighed heavily on investor sentiment and pricing, particularly across the commercial office sector. Residential values have also underperformed, though for different structural reasons.
Now, there are early signs of recovery.
Improved affordability, population growth and a stabilising economic backdrop are beginning to draw buyers back into the market, with both residential and commercial sectors showing tentative signs of improvement.
Auckland’s turning point
Across the Tasman, Auckland has faced its own challenges, particularly from an outflow of younger workers to Australia, which has dampened demand and stalled price growth.
But here too, the tide appears to be shifting.
A return to positive migration, lower interest rates and policy changes — including the easing of foreign buyer restrictions — are expected to support a gradual recovery, alongside renewed interest from offshore capital.
A market that rewards precision
If there is one unifying theme, it is this: broad-brush strategies no longer work.
MaxCap’s research highlights that the most compelling opportunities are increasingly found outside the traditional powerhouses of Sydney and Melbourne, requiring investors to take a more targeted, locally informed approach.
“Given these persistent performance gaps, there is plentiful scope for alpha returns, just by picking the right locations and market segments,” the report notes.
In other words, success in this market is no longer about being in property — it is about being in the right property, in the right place, at the right time.
And increasingly, that place may not be where you expect.
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