RBA Leaves Door Open to Another Rate Hike Amid Housing Market Softening

Reserve Bank of Australia Governor Michele Bullock signaled that interest rates may rise again in August, citing the housing market's unexpected cooling. The RBA had anticipated a more modest slowdown in prices, but instead saw a significant pullback. Ms. Bullock noted that this easing is largely due to policy developments and softening sentiment.

Despite the decline in prices, Bullock emphasized that inflation remains too high, and the board may need to increase interest rates again if it doesn't improve. This would be the fourth rate hike this year, with a 0.25 percentage point increase potentially adding $92 to monthly mortgage payments for borrowers with a $600,000 loan.

Canstar's data insights director, Sally Tindall, predicted that lenders may cut new-customer rates despite the looming RBA hike. The upcoming inflation figures and forecasts will play a crucial role in the board's decision-making process, set to be announced next month.