Markets barely flinched after the Reserve Bank of Australia (RBA) wrapped up its latest monetary policy meeting.
The nation's central bank opted to hold the official cash rate (OCR) at 3.6%, citing stubborn inflation and lingering economic uncertainty, both at home and overseas.
"I don't think it's a bad-news story; I think it's a good news story," RBA Governor Michele Bullock told reporters during Tuesday afternoon's press conference.
"We've got a situation now that is actually quite a positive situation," she continued, referring to subdued inflation and historically-low unemployment rates.
The governor also made clear that she was not going to give forward guidance.
"I'm not going to predict what the interest rate is going to be in the next three to six months," Bullock said. "But what I would say is that today, we felt that given the evidence we had, it was reasonably balanced decision.
"What we're focusing on [in the future] is an interest rate path that will deliver us inflation sustained with the band," she continued. "That could mean a couple more reductions. It might not. I don't know at this point. And we'll look at all this again in November."
Still, the news is a blow to mortgage holders already grappling with rising living costs, surging property prices and a persistent national housing shortage.
"We're in a very difficult position with the property market," Bullock acknowledged. "Having said that, there's nothing I can do about it personally. We don't target housing prices. Can we impact housing prices? Or should we impact housing prices? No.
"We have to focus on our mandate, which is inflation," she continued. "I've said a number of times before, the problem in the housing market is a structural deficit of supply. That is the problem. Governments now get that. And you're now starting to see some action on that. But it's going to be slow to work its way through. It's going to take time. I'm not confident it's going to make any impact in the next two years.
"The bottom line is, all I can do is make sure I keep inflation low and stable," Bullock said. "And keep employment as strong as possible. Because that gives people the best opportunities to get jobs, and to be able to possibly get into the market."
Here's what some market players are saying in response.
Head of broker distribution at National Australia Bank (NAB)
“With the RBA holding rates today, households have a degree of stability as they plan for the months ahead. Consumer confidence is gradually lifting, and we expect the cash rate to remain on hold until May 2026. With activity in the [first-time buyer] segment likely to pick up, it’s a timely opportunity for brokers to engage with first[-time] home buyers, guide them through the [government housing] scheme and provide support throughout the purchasing journey."
Chief executive officer at Loan Market
"Borrower activity will remain buoyant during the real estate market’s spring buying season despite the Reserve Bank of Australia’s decision to maintain the cash rate. It’s incumbent on brokers to help first[-time] home buyers make a sustainable transition to ownership, acting in the client’s best interests during their purchase and beyond. Brokers will be sought out for their commitment to financial literacy over the remainder of 2025 and into 2026."
Managing director at the Financial Brokers Association of Australia (FBAA)
"There are still many borrowers doing it tough and seeking more rate relief. They should know their alternatives. Brokers should encourage customers to talk to their lender first and ask for a rate reduction. But if this is rejected, explain that there may be refinancing options. When dealing with customers we also should never stop pointing out that brokers are legally obligated to act in their best interests and provide guidance consistent with their individual circumstances.”
Executive director at Connective
"The RBA's decision to hold the cash rate steady signals caution. Yet it was expected. Even so, housing demand is proving resilient. It is clear that borrowers are re-engaging with the market despite affordability constraints and a shortage of property stock that continues to keep prices high. Refinancing also remains a critical theme and borrowers are increasingly willing to switch lenders who do not pass on rate cuts quickly.
"Looking ahead, it seems unlikely that we will see another rate cut this year. Brokers should help clients prepare for that possibility as it may spark a wave of buyer activity and refinancing decisions as the spring season gathers pace.”
Chief executive officer and Senior Executive at Finsure Group
"The Reserve Bank of Australia is likely to maintain a 'wait-and-watch' approach for the rest of the year, despite a slight increase in the latest inflation data. The onus remains on mortgage brokers to help clients navigate the various scenarios and reaffirm their position as a trusted financial partner.”
Chief executive officer of the Mortgage and Finance Association of Australia (MFAA)
"The decision… will be disappointing for many home loan borrowers. Despite this outcome, brokers are finding plenty of opportunities to assist clients with refinancing or securing a better deal with their current lender."
Economic director at Compare the Market
"Absolutely no surprise that the Reserve Bank kept official interest rates on hold. [The RBA] will wait for the September quarter inflation figures to come out before deciding on interest rate movements in their November board meeting. If that September quarter inflation figure is higher than expected, I reckon all bets are off for a cut in November."
Chief executive officer at Mortgage Choice
"The RBA's decision to keep the cash rate steady at its September meeting was expected given the latest economic data on inflation and unemployment. Competition in the market is likely to ramp up when the Home Guarantee Scheme expansion comes into effect. The increase in the scheme's property price caps and the removal of income limits means Australian first[-time] home buyers can now buy their first home with only a 5% deposit and save tens of thousands on lenders mortgage insurance (LMI)."
