A barrage of conflicting signals are clouding Australia's lending markets at the moment.
The list includes persistent inflation that has kept cost-of-living pressures elevated, looming tax changes that have shifted investor sentiment, a stubborn housing shortage, and continued global uncertainty, mixed with a slowing economy, rising wages and early signs of a softening labour market. And suddenly, the outlook becomes increasingly difficult to read.
With the Reserve Bank of Australia (RBA) scheduled to soon meet to discuss the direction of monetary policy, markets are left grappling with a familiar question: will the central bank raise or hold steady?
"I don't really know at the moment, because [the environment] is just constantly changing," Jamison Banham, founder and director of Gold Coast-based brokerage First Broker, told Australian Broker. "Everyone is getting mixed signals and mixed information across the board."
The RBA has lifted the official cash rate (OCR) three times in 2026, taking it to 4.35%. The central bank has consistently argued that higher interest rates are the necessary trade-off to bring inflation under control. But the pain is being felt across the market. Mortgage holders and investors continue to absorb higher borrowing costs, while some major lenders report weakening demand for credit.
Until recently, all four of Australia's Big Four banks expected the RBA to keep rates on hold at its upcoming meeting, with Westpac forecasting a 25-basis-point increase in August. But National Australia Bank (NAB) rattled markets when it broke ranks, predicting the bank's next move would be a rate cut, although timing is unclear.
In this two-part series, Australian Broker caught up with industry participants for their thoughts on the central bank's next move, and what it will mean for markets in the months ahead.
Mortgage and finance broker at Brisbane-based Mortgage Advice Bureau (MAB) Australia
"I think they may hold. The market has slowed in Melbourne and Sydney. Not so much, maybe in Queensland, yet. But properties are on the market for a lot longer. And I think the cost of living impacts everything that's happening around the budget. People are being a bit cautious right now. Definitely inquiries have slowed down. We've still got a lot of clients that we're helping. But I think that people are just, sort of, holding to see what's going to happen."
Broker at Adelaide-based Loan Market
"I think the RBA will hold this time. And I think there's probably a 50-50 chance in August we get either a hold or a rate increase. Everyone's sort of expecting a hold because the GDP was weaker than expected. The forecast is suggesting the economy slowed a little bit more than what they thought it would. So I think holding would be the best thing to do while we sit and wait to see how these tax changes actually impacted the market. Because it's still too soon to move. To continue lifting or decreasing rates at the moment without having data to back it up would be silly."
Founder and director at Gold Coast-based brokerage First Broker
"I really don't know at the moment because [the environment] is just constantly changing. With how the economy is and everything that's happening in Australia with the budget, it's all up and down. So I think everyone's getting mixed signals and mixed information across the board. I don't think it's going to be a rate cut though. I think everyone, everywhere is just getting mixed information and mixed signals, and I really don't know if that's going to change until everything's implemented [in the budget] and everything's kind of calmed down and relaxed."
Finance broker at Sydney-based JustFin
"I think the bank will hold. But I'm just basing that on the fact that I don't think rates will go up. And they're definitely not going to go down. So holding is the only option left."
Managing director at Melbourne-based Loan Studio
"I think they'll hold. I think the bank will wait, given the recent increases, to see more data. Depending on where things are, and should nothing change dramatically, I think the bank will look to increase rates again [in August.] But at this stage, I think the likelihood is that they will watch and wait for this one."
Founder and managing director at Sydney-based brokerage With Finance
"I expect the RBA to hold. While some might call that optimistic, the reality of the property market post-federal budget means Australia simply cannot afford another hike. An increase now would stall the economy and severely hurt everyday people. Pushing rates higher also directly contradicts the government's current messaging around helping Australians achieve homeownership.
Holding the cash rate will allow first-time homebuyers to purchase within the borrowing limits they're already comfortable with. It will bring much-needed stability to the investor market, and it will give the entire housing sector a moment of relief."
Founder and principal broker at Melbourne-based GB Financiials
"I don't know, but my gut feeling says it might be a hold. I have started, already, calculating my clients borrowing capacities, based on an increase. We are in between so many other things [happening in the market], and it's an election year here in Victoria. But if you look at recent inflation numbers, they are slightly reduced, which gives us a little bit of relief. We are trying to have a balanced approach. Maybe later in the year there might be an increase, after the financial year ends in July. But I think this month it is going to be a hold."
