Finder’s RBA Survey: Experts predict another rate hold in August

It seems mortgage holders can breathe another sigh of relief, with most experts from a Finder poll tipping the RBA to leave the cash rate where it is.

In this month's Finder RBA Cash Rate Survey™, 38 experts and economists weighed in on future cash rate moves and other issues relating to the state of the economy.

The majority of panellists (92%, 35/38) expect the RBA to hold the cash rate on Tuesday, keeping it at 4.35%.

However almost half of experts say the pause may be temporary, with 44% expecting at least one more hike before the end of 2026.

This has dropped from 55% who last month predicted at least one more hike this year.

Richard Whitten, money and home loans expert at Finder, said while back-to-back pauses will bring a sense of stability, mortgage holders shouldn't confuse a rate hold with rate relief.

"Interest rates are as high as they've ever been in recent history. And with higher house prices, this makes repayments incredibly expensive.

"With almost half our panel still forecasting one more increase this year, borrowers need to stay vigilant.

"If you're one of the 38% of homeowners who struggled to pay their mortgage in July, now is the time to act. Negotiating a discount with your bank or switching to a cheaper lender is the fastest way to give yourself a rate cut and save some cash," Whitten said.

James Morley from the University of Sydney said the latest inflation data gives space for the RBA to hold at the August meeting.

"But the next direction is uncertain and could be up," Morley said.

Scott Kuru from Freedom Property Investors is also predicting a hold this month, noting that a rate rise in August would be a cruel blow.

"Only someone who lives under a rock wouldn't be aware of the effects of the three interest rate hikes so far this year washing through the economy.

"They've slowed the housing market – particularly at the Top End of Town – and generally made life harder for Aussies with a mortgage in a cost of living crisis. Inflation is also less than the RBA itself predicted," Kuru said.

Tax changes and bringing house prices down

The government's negative gearing and capital gains tax (CGT) reforms are getting a failing grade from the nation's experts, even as house prices fall in the country's two biggest markets.

Panellists were asked whether the reforms are working to improve housing affordability, level the playing field for first-home buyers and boost new housing supply.

Just 23% (7/31) said yes, while more than 1 in 3 (39%) (12/31) said no. A further 39% (12/31) said it is too soon to tell.

Cameron Kusher from Kusher Consulting said the government's changes had shattered market confidence and pulled the ladder up on future investors.

"Some more first-home buyers are likely to have entered the market but with prices falling I suspect many will choose to wait to buy cheaper when the market bottoms," Kusher said.

Leanne Pilkington from Laing+Simmons agreed the changes weren't working.

"The current dampening of the property market is more cyclical than anything, as rate rises and broader economic uncertainty follow a prolonged period of sustained growth against a backdrop of constrained supply.

"This is a long-term issue which the reforms do not meaningfully address.

"Further, rental vacancy remains extremely tight, rents continue to rise, making it as difficult as ever for people to make the transition to first-home buyer," Pilkington said.

Shane Oliver from AMP said it was too soon to tell.

"The changes are helping drive a fall in home prices but it's too early to tell whether it's just a temporary flick off the top and whether they will actually boost new housing supply or reduce it," Oliver said.

However Nicholas Gruen from Lateral Economics said there were signs the changes were working.

"There's good evidence in Victoria that investor demand is cooler which helps first-home buyers (at least in the short term).

"In the long-term we need to build more homes, which state governments are trying to do, but still taking their time about," Gruen said.

**For the full list of panellist responses please get in touch with Finder's PR team**

Asked separately what is actually driving the recent decline in Melbourne and Sydney prices, 41% (12/29) pointed to rate hikes and higher interest rates, while 34% (10/29) nominated the tax and regulatory changes.

Interestingly, almost half (48%, 12/25) either support or strongly support the objective of bringing house prices down, while 1 in 4 (24%, 6/25) oppose it.

*Experts are not required to answer every question in the survey.

Here's what our experts had to say about the cash rate:

Dr. Andrew Wilson, My Housing Market (Increase): "Underlying inflation – the RBA preferred inflation measure – remains stubbornly at the highest level since July 2024 and well above the RBA target range. Although international oil prices are now more likely to remain below the previous peaks of 2024, the removal of the government's recent fuel subsidy has sharply increased fuel costs at the bowser which will add to inflation. With continuing surging electricity prices, higher home rental growth and house building costs, the RBA is now clearly more likely to raise rates."

Jakob Madsen, UWA (Increase): "The real interest rate is still too low and the after tax real interest rate negative."

Adj Prof Noel Whittaker, QUT (Increase): "It's a line ball call, but with fuel prices going up, construction costs still on the rise, and the war in Iran still uncertain, I think the RBA will opt for one more rise. Another factor is that there have been reports this week that consumer spending is still strong."

Madeline Dunk, ANZ (Hold): "Trimmed mean inflation printed below the RBA's expectations in Q2. When considered alongside the higher than expected unemployment rate (relative to their forecasts), we think this gives the RBA space to see how the economy will evolve from here."

Shane Oliver, AMP (Hold): "Slightly softer than expected June quarter underlying inflation along with slightly weaker than expected labour and housing market conditions should allow the RBA to remain in "wait and see" mode this month and so remain on hold. But with inflation remaining way too the RBA is likely to retain a tightening bias."

Anthony Waldron, Mortgage Choice (Hold): "The latest CPI data published by the Australian Bureau of Statistics showed that headline inflation has now fallen two consecutive months. I expect this should give the RBA enough reason to take a pause and keep the cash rate on hold in August."

Matthew Greenwood-Nimmo, University of Melbourne (Hold): "The latest inflation numbers came in a bit lower than expected, the labour market appears to be gradually softening and the housing market is weakening. Consequently, I think the RBA is likely to keep the cash rate on hold in August."

Kyle Rodda, Capital.com (Hold): "The RBA will maintain a wait-and-see approach to policy but will likely emphasise vigilance about inflation and adopt marginally more hawkish language after signs of labour market resilience in last month's labour force data."

Mathew Tiller, LJ Hooker Group (Hold): "Inflation remains high, but the latest data suggests it is beginning to moderate, while the labour market is still tight but showing some early signs of softening. The three recent rate hikes are already flowing through to the property market and, when combined with tax policy changes, are weighing on buyer demand, borrowing capacity and price growth."

Malcolm Wood, Ord Minnett (Hold): "This is a lineball decision. Despite stronger jobs and spending data we think the lower-than-expected inflation data gives the RBA more time to analyse the impact of its 3 rate rises and the tax changes."

Geoffrey Kingston, Macquarie University Business School (Hold): "The Bank is likely to hold this month. The latest labour market data showed slow growth in full time employment, and historically this has heralded lower inflation. The latest inflation data suggested overall a slight easing of inflationary pressures. The Bank will also consider the pronounced weakening of house prices, even though that is theoretically supposed to be outside its new remit."

Garry Barrett, University of Sydney (Hold): "Easing inflationary pressure, international disruption and uncertainty."

Stephen Koukoulas, Market Economics (Hold): "Policy is tight enough to get inflation lower and the fall out from the decline in house prices will help to see inflation fall rapidly."

Nicholas Gruen, Lateral Economics (Hold): "It seems to be what people are expecting. If they weren't going to do it, they might have been jawboning an increase a bit more."

Scott Kuru, Freedom Property Investors (Hold): "Only someone who lives under a rock wouldn't be aware of the effects of the three interest rate hikes so far this year washing through the economy. They've slowed the housing market – particularly at the Top End of Town – and generally made life harder for Aussies with a mortgage in a cost of living crisis. Inflation is also less than the RBA itself predicted. A rate rise in August would be a cruel blow."

Sam White, Loan Market (Hold): "With recent inflation data coming in just below forecasts, the RBA has breathing room to evaluate how external factors will impact the economy. We are seeing house prices cool as lending has become restricted following the previous cash rate increases and so I believe the Board may take a cautious approach to avoid further downturn."

Leanne Pilkington, Laing+Simmons (Hold): "The case to hold rates steady is reinforced by weaker-than-expected inflation figures. It is also important for consumers, businesses, the property market and the economy generally. The impact of higher petrol prices is effectively a doubling down of the impact of the rate rises from earlier in the year, as consumers rein in spending elsewhere."

Trent Wiltshire, RLB (Hold): "A strong labour market, ongoing high inflation and risks of rising inflation expectations due to the Middle East conflict will mean the RBA will maintain a hiking bias, but rates will likely remain on hold until later in 2026."

Evgenia Dechter, UNSW (Hold): "Inflation is still too high, but the economy is showing signs of a slowdown, including weak GDP growth, upward trend in unemployment rate, and increasing underemployment. The RBA can afford to wait for more evidence rather than risk weakening the economy and labour market more than necessary."

Jeffrey Sheen, Macquarie University (Hold): "The RBA is evidently committed to returning underlying inflation to the midpoint of its 2–3% target range, and this is supported by the relatively well-anchored trend in longer-run inflation expectations among firms and households. The latest CPI figures were slightly weaker than the RBA's May forecasts, moving inflation marginally in the right direction, although this was partly driven by volatile components such as oil and transport costs. Given the heightened uncertainty, both globally and domestically – particularly around the outlook for house prices and household demand – I think the RBA is likely to adopt a wait-and-see approach. Having already raised the cash rate three times this year, it will want to assess whether the cumulative effect of those increases is sufficient to bring underlying inflation back to target before tightening policy further. I expect the Board to hold the cash rate steady at its August meeting."

Dale Gillham, Wealth Within Group (Hold): "There are a couple of things to consider, one is the negative reaction to the May Federal budget. This has certainly changed how both individuals and businesses are looking at the future. The other point to consider is that over the 12 months to 30 June CPI eased slightly and so the RBA will most likely want to see if this continues."

James Morley, University of Sydney (Hold): "The latest inflation data gives space for the RBA to hold at this meeting. But the next direction is uncertain and could be up."

Graham Cooke, Aussie Insights (Hold): "The RBA will hold the rate in August because recent inflation data came in cooler than anticipated. We were bracing for price increases, but instead saw a dip, partially driven by housing costs. As this trend is likely to continue, the likelihood of a hike for the next few months has dissipated."

Brodie Haupt, WLTH (Hold): "With the downward trend shown by the latest CPI figures, the RBA board could now leave the cash rate on hold. Keeping in mind that the CPI is still above their target band, we will have to wait and see if the inflation slowdown continues."

Mala Raghavan, University of Tasmania (Hold): "Despite inflation remaining above target and labour market conditions staying tight, the RBA is likely to keep the cash rate unchanged in August. Heightened global economic uncertainty, stemming from geopolitical tensions, potential AI-related disruptions, and climate-related challenges in Europe, could weaken Australia's economic outlook, increase supply-side cost pressures, and contribute to a gradual easing of labour market conditions. These risks are likely to support a more cautious monetary policy stance."

Stella Huangfu, University of Sydney (Hold): "I expect the RBA to hold the cash rate at 4.35%. The June quarter inflation data came in below expectations, with both headline and trimmed mean inflation easing. While inflation remains above target and the labour market is still relatively tight, the latest data suggest underlying inflationary pressures are gradually moderating. Given the cumulative tightening already in place, the Board is likely to wait for additional evidence before considering any further policy action."

Timothy John Reardon, HIA (Hold): "They will wait for the impact of the three rate increases from early 2026 to flow through. And for the adverse impact of the Budget to clear."

Stephen Miller, GSFM (Hold): "Probably to give some time for the RBA to assess the effects of policy tightening earlier in the year."

Tim Nelson, Griffith University (Hold): "Inflation still above the target band but given global uncertainty and falling consumer confidence, RBA may be hesitant to lift rates."

David Robertson, Bendigo Bank (Hold): "The RBA can take another breather this month keeping the Official Cash Rate at 4.35% after the latest CPI data saw a levelling off in underlying inflation, but will maintain their tightening bias until core CPI is back below 3% (which might not be until late into 2027). The risk of one more hike hasn't changed."

Peter Boehm, Pathfinder Consulting (Hold): "The Reserve Bank is likely to leave interest rates unchanged at its August meeting because the available economic data suggest that inflationary pressures are gradually easing, even though inflation remains higher than the Bank would like. While employment levels remain relatively strong, household spending has slowed considerably as higher mortgage repayments and living costs continue to place pressure on family budgets. At the same time, previous increases in interest rates are still working their way through the economy, meaning that the full impact of earlier decisions has not yet been felt. The recent increase in oil and fuel prices is certainly a concern because higher transport and energy costs can eventually flow through to the prices of goods and services. However, the Reserve Bank is likely to view this as an external shock rather than a sign that inflation is becoming permanently embedded in the economy. The Board will also be conscious that increasing rates too aggressively carries risks of its own, including weaker economic growth, higher unemployment and increased financial pressure on households and businesses. Taken together, the evidence suggests that the Reserve Bank is more likely to adopt a cautious approach, leaving rates unchanged while continuing to monitor inflation, employment and consumer spending over the coming months. Looking further ahead, the most likely scenario is that interest rates remain unchanged for another few months while the Reserve Bank assesses the effect of higher fuel prices and monitors inflation data. If inflation continues to fall and economic growth remains subdued, the discussion will probably shift from whether rates should rise further to when rates might eventually begin to fall. On the other hand, if oil prices continue to rise, unemployment remains low and wage growth strengthens, the Reserve Bank could decide that another increase is necessary later in the year. At present, however, a prolonged period of stable interest rates appears to be the most likely outcome."

Michael Yardney, Metropole (Hold): "Annual headline inflation has fallen for the third consecutive month to 3.8% in June, taking pressure off the RBA to issue a fourth rate hike this year at a time when the average Australian is struggling with the cost of living. However, core inflation is not making as much progress and is likely to remain a concern for the RBA."

Nicholas Frappell, ABC Refinery Pty Ltd (Hold): "August's trimmed mean CPI came in at 3.60 % instead of the anticipated 3.80 %, and unemployment rose slightly in Q2 to 4.40 %, so there is some evidence for easing in the domestic economy, and there may be enough for the RBA to pause."

Cameron Murray, Fresh Economic Thinking (Hold): "Inflation still trending towards the target band."

Matt Turner, GSC Finance (Hold): "Inflation data weaker than expected but employment numbers still elevated. There is no case to cut currently - at least until we see inflation back within acceptable range or signs of stress in the economy with increased unemployment."

Saul Eslake, Corinna Economic Advisory Pty Ltd (Hold): "Although inflation remains 'too high', the 'underlying' inflation rate over the year to the June quarter (of 3.5%) was sufficiently below the RBA's own most recent forecast for it, in combination with clear signs of an easing in the housing market, to remain 'on hold' for the time being - given its judgement that with the cash rate at 4.35% monetary policy settings are now 'restrictive'."

Cameron Kusher, Kusher Consulting (Hold): "Inflation has moderated and although it remains too high, I think that after three rate increases already this year the RBA will feel like they have time to wait and see the impact of those rate increases."

Danny Kim, Jarden (Hold)