As expected, the Reserve Bank of Australia (RBA) has left interest rates on hold at 4.10%.

After starting 2025 with a rate cut in February, this decision reflects the RBA’s continued cautious approach to managing inflation and economic growth.

The RBA has continued its conservative approach, admitting that whilst inflation has fallen substantially since the peak in 2022, “nevertheless, the Board needs to be confident that this progress will continue so that inflation returns to the midpoint of the target band on a sustainable basis. It is therefore cautious about the outlook.”

The board even noted that they believe the decision to leave the cash rate at 4.10% means that “monetary policy remains restrictive” but “remains resolute in its determination to sustainably return inflation to target and will do what is necessary to achieve that outcome.”

The big question for many Australians remains: What does this mean for property prices, mortgage repayments, and the broader economic outlook? Let’s take a look.

What’s going on with property prices?

If you’ve been following the property market, you’ll know it’s been through a rollercoaster ride in recent years. After the aggressive interest rate hikes throughout 2023 and 2024, the Australian housing market has settled into a period of some stability.

According to CoreLogic’s Home Value Index, property values nationally showed an increase of 0.4% in March 2025. While this growth doesn’t match the explosive heights of pre-pandemic years, steady, moderate gains indicate that the market is adjusting rather than declining.

The gains across the board in Australia follow three consecutive months of subtle declines in home values, which dipped 0.5%.

“Improved sentiment following the February rate cut is likely the biggest driver of the turnaround in values, along with the cut’s direct influence of a slight improvement in borrowing capacity and mortgage serviceability,” said Tim Lawless, research director for CoreLogic.

“With the rate-cutting cycle expected to be drawn out, it will be interesting to see if this positive inflection in values can last in the face of affordability constraints.”

Mark Bouris and Stephen Koukoulas told Property Insights listeners that last week’s Federal Budget should see some pressure come out of the housing market.

Koukoulas said, “one of the reasons why house prices kept booming, to be frank, when we had interest rate hikes a year and two ago, was because of incredible demand.”

“Immigration was massive. We weren’t building enough houses, the rental market was as tight as a drum, and that spilled over into prices.”

“So the fact that the government’s now targeting a lower net migration intake, and that was confirmed in the budget the other night, getting back to where we were pre pandemic, which I think was sort of like an equilibrium, if there’s such a thing, immigration takes some of the pressure off that housing market, which takes some of the pressure off the inflation rate.”

For first-home buyers and property investors, the RBA’s decision today and consistent commentary provides an opportunity to reassess goals and potentially to enter the property ladder at least without fear of rate hikes in the foreseeable future.

What would bring about a May Rate Cut?

Between now and the next RBA board meeting, there will be three pieces of crucial data that would be the drivers for a rate cut in May according to Koukoulas.

“Critically, we will get the March quarter inflation numbers, which comes out at the end of April.”

“If we see a 0.5 or 0.6 reduction in the trimmed mean, that would mean game on for a rate cut.”

“The other two important numbers are the monthly employment numbers which will be released in the middle of April and just before the next board meeting in May.”

Another factor influencing next month’s RBA decision will be the Federal Budget, which introduced measures aimed at easing cost-of-living pressures, such as continued energy rebates for households.

While these policies are expected to provide relief, both Koukoulas and Bouris agree that the budget’s non-inflationary focus won’t significantly alter the RBA’s decision-making.

Koukoulas noted that while the energy rebates and other support measures will help households, they won’t necessarily add pressure to inflation.

“The government has been careful with its spending. These are non-inflationary measures, which is important because the RBA needs to ensure inflation doesn’t pick up again,” Koukoulas explained.

Bouris agreed, suggesting that while the Federal Budget provides necessary support for Australians, it isn’t likely to cause the RBA to change course on interest rates in the short term.

“The Federal Budget is an important part of the puzzle, but it won’t be the key driver for a rate cut. The RBA needs to see sustained economic stability before making that move,” Bouris said.

What’s Next for Homeowners and Investors?

Looking ahead, the RBA’s decision leaves the market in a state of cautious optimism. With inflation continuing to stabilise, and renewed hope that inflation will remain in the target range during the March Quarter, many economists predict that a rate cut in May is more and more likely.

For homeowners, the status quo means no immediate change to their mortgage repayments, but there may be long-term relief if rates start to decrease later in 2025.

For property investors, the current environment offers stability without drastic rate hikes. Bouris maintains that when it comes to property, it pays to think long-term and keep a steady hand when evaluating the market.

“It’s not about timing the market in the short term. It’s about having a solid strategy and looking at the fundamentals of your investment over the next five to ten years,” said Bouris.

If you’re looking for stability on your property journey, working with an expert mortgage broker can help you navigate the complexities of the market, find the best deal, and potentially save you thousands over the life of your loan.

Don’t wait for the next rate decision. Chat with our home loan experts today to ensure you’re making the most of the current environment and preparing for what’s next.