Inflation data boosts interest rate hopes
In a world where predictions about the future of official interest rates seem to change as often as some people change their underwear, the latest news from the Australian Bureau of Statistics this week would have given lots of local homeowners and aspiring buyers an extra reason to feel positive about the year ahead.
Prior to the ABS inflation figures this week, showing that prices have eased for the second month in a row, (taking annual inflation down from 4.0 percent to 3.8 per cent), financial markets had the chances of a rate rise in August at 22 percent.
With the inflation data at unexpectedly low levels, those expectations have totally disappeared. Indeed, all ‘The Big Four Banks’ are now advising their clients that they expect the Reserve Bank to leave official interest rates on hold for the remainder of 2026.
The Chief Economist at Westpac, Luci Ellis. was quoted during the week as saying, “although the RBA may debate the case for a rate hike at next month’s meeting, the case for one no longer existed.” She also added that ”the RBA will probably hold the cash rate steady at 4.35 per cent this year, with a cut possible from August 2027.”
For those that may have missed the details, the ABS says that the single largest price drop in the June data was petrol, which tumbled by 10.9 per cent after a similarly substantial fall in May. We can only hope that the world gains some clarity on the way forward in the Middle East as soon as possible.
In the meantime, if you would like an obligation-free chat about your local property market and what options may be open to you in the remainder of 2026, you can give the team at Barry Plant Thomastown a call during the week on 9466 3233.
We’d love to provide you with some clarity and direction.
Cheers,
Con Constantinou
Barry Plant Thomastown
Get more from Barry Plant.
Sign up for our newsletter