RBA Interest Rate Decision – 11 August 2026
The RBA has decided to keep the interest rate on hold at 4.35% in the August 2026 meeting, as widely expected by the market. Today’s decision has marked the second time the rate is on hold, after a series of hikes: 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.
The pause is supported by more favorable current macroeconomic conditions in comparison to in May
- ABS data shows unemployment has risen to 4.4% in July 2026, from 4.3% in March. Despite marginal, the increase suggested 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 the global economic conditions have improved since the last RBA meeting. There is still real uncertainty in the peace deal between the U.S. and Iran, but a positive news is that crude oil prices have fallen to US$80 per barrel today from US$100 per barrel in April and May. 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 3.8% in June, persistently trending down from 4.6% in March 2026. Trimmed mean inflation – excluding volatile items was 3.6% in June, up slightly from 3.3% in the 12 months to March 2026. While still above the 2% – 3% target range, core inflation has been stabilising that is encouraging.
What does this mean for property investment?
With the stabilisation of the cash rate, confidence among both buyers and sellers is expected to improve. Buyers are likely to gradually return to the market, while sellers will face less pressure to distressed sell. Despite this, the impact is likely to differ across market segments.
- Premium established segments: Prices are expected to find a floor and gradually stabilise through the remainder of 2026. This is because the removal of negative gearing has greater impact on the holding costs of expensive properties. The costs to hold a median price house in Sydney could be reaching $60k to $80k per year, which would hold off many buyers.
- Brand-new properties in tightly supplied markets: This segment is expected to remain comparatively resilient. Ongoing structural housing undersupply continues to support demand, while the negative gearing eligibility and capital gain tax discount for investors is likely to channel additional investment into new housing stock.
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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]