RBA Interest Rate Decision – 16 June 2026
The RBA has decided to keep the interest rate on hold at 4.35% in the June 2026 meeting, as widely expected by the market. Today’s decision has ended a series of hikes in the previous three meetings, from 3.6% to 3.85% in February, 3.85% to 4.1% in March and 4.1% to 4.35% in May this year.
In the context of housing tax policy changes, the decision will help to regain buyers’ confidence, reactivate buyer activities, and ultimately offset the uncertainties under the new housing tax rules.
The pause is supported by more favorable current macroeconomic conditions in comparison to in May
- ABS data shows unemployment has risen to 4.5% in April 2026, suggesting earlier rate increases are now flowing through to the broader economy. This is reducing pressure on wage growth, helping to cool input costs and moderate the price growth of goods and services.
- The Board also assessed more favorable current global economic conditions, particularly following the peace deal between the U.S. and Iran on 15 June 2026, which includes the full reopening of the Strait of Hormuz. Crude oil prices have fallen to US$80 per barrel today from US$93 per barrel within a few days. Given that Australia has already secured additional fuel supply from other sources, downward pressure on fuel prices is expected to build from now through to the end of the year.
- Most importantly, headline inflation has eased: ABS CPI data shows annual inflation moderated to 4.2% in April, down from 4.6% in March 2026. Trimmed mean inflation was 3.4% in April, up slightly from 3.3% in the 12 months to March 2026. While still above the 2% – 3% target range, inflation is trending downward, which is encouraging.
What does this mean for property investment?
- Premium established segments show weakness: we already see weaker buyer confidence and reduced participation of investors are weighing most heavily on expensive and highly negative geared established markets. This is due to the end of negative gearing and the removal of capital gain tax discount for established properties.
- Brand-new property remains relatively better supported: New builds continue to benefit from structural housing undersupply, and the policy advantage of retaining negative gearing eligibility for future investors will see more capital running to new builds. On top of this, the stabilization of interest rate and expected cuts this year will boost investor confidence, especially in more affordable segments and where the rental yield is high.
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[avatar user=”richard” size=”thumbnail” align=”left” link=”file”]Richard Sheppard is the Founder and Director of inSynergy Advisory and has spent more than 30 years researching property markets and advising Australian investors on long-term wealth creation through strategic property investment.[/avatar]