In this article
Kooky
Builder of Shaka, the payment router that pays every agent their commission on closing date.
About Kooky and Shaka →The Reserve Bank left the cash rate target at 4.35 per cent on 11 August 2026. The decision of the Monetary Policy Board was unanimous, and the Board's statement was direct about the housing market: momentum has shifted, it said, with housing prices falling in some capital cities and new housing loans declining noticeably.
For Queensland, the timing is pointed. Eight days earlier the Cotality Home Value Index showed Brisbane dwelling values down 0.6 per cent in July and regional Queensland down 0.3 per cent.
Reserve Bank of Australia, monetary policy decision of 11 August 2026; Cotality Home Value Index, July 2026.
What the Board said about housing
The statement describes financial conditions as tighter after three rate increases this year, which have lifted money market rates and bond yields and pushed up the exchange rate. It says consumer spending growth is slowing gradually, as the Bank expected, and that labour market conditions have eased by a little more than expected in the past few months. Business investment and business borrowing, by contrast, are described as still robust.
On housing the wording is short and factual: prices are falling in some capitals and new lending is down noticeably. AAP's report of the decision, carried by The Canberra Times on 11 August, adds that the Bank noted a deeper decline in housing prices than anticipated could weigh further on economic growth.
That is a notable sentence for anyone who works in property. A central bank that is trying to slow spending expects some cooling in housing. It is also saying that too much cooling would be a risk to its own forecasts.
The Bank's quarterly Statement on Monetary Policy, which the Board considered in making the decision, sets out the reasoning. It expects housing prices to keep declining gradually for a period, citing tighter monetary policy, the changes to tax policy and economic conditions, with a recovery from 2027. Lower prices, it says, reduce household spending through lower wealth and through fewer homes changing hands, since a sale brings spending on moving, fitting out and furnishing. The effect on new building is expected to be smaller than in past downturns, because a large amount of work is already committed.
Related readFourth rate rise of 2026 lifts the cash rate to 4.60 per centWhy there was no rise, and why one is still possible
Inflation is the reason the cash rate is where it is. Headline inflation was 3.8 per cent over the year to the June quarter and trimmed mean inflation, the Bank's preferred measure, was 3.6 per cent, according to reports of the decision by Accountants Daily and The Urban Developer. According to the AAP report, the trimmed mean came in below the 3.8 per cent the Bank had forecast but still above its target band of 2 to 3 per cent.
The Board's statement says inflation picked up substantially in the second half of 2025, partly because the economy was running up against its capacity, and that the conflict in the Middle East has since added to prices through oil. It does not expect inflation to return to around the midpoint of the target range until late 2027.
| Measure | December 2026 | June 2027 | December 2027 |
|---|---|---|---|
| Trimmed mean inflation | 3.3% | 3.0% | 2.6% |
| Unemployment rate | 4.5% | 4.6% | 4.7% |
| Dwelling investment, annual growth | 2.1% | 0.9% | -0.7% |
Reserve Bank of Australia, Statement on Monetary Policy, August 2026, outlook chapter. Forecasts, not outcomes.
Savings.com.au, reporting the forecasts the same day, notes that the Bank had previously expected trimmed mean inflation of 3.5 per cent at the end of 2026. The forecasts are built on an assumed path for the cash rate that stays close to its present level through 2027, so they are not a promise of lower rates.
The same outlook has the economy growing slowly while that happens. The Statement on Monetary Policy forecasts growth in gross domestic product of 1.4 per cent over the year to December 2026, rising to 1.8 per cent by the end of 2028, and an unemployment rate that drifts up from the 4.4 per cent recorded in June. The Board's statement adds that the outlook is unusually uncertain: the course of the Middle East conflict is hard to predict, growth among Australia's trading partners has been stronger than expected on the back of investment in artificial intelligence, and weak productivity growth at home limits how fast the economy can expand without adding to inflation.
Related readHow interest rates reach Queensland home prices, step by stepThe Board did not signal relief. Its statement says it will do what it considers necessary to bring inflation back to target, including increasing the cash rate target further if upside risks materialise, and it names the conflict in the Middle East and a slow recovery in oil supply as sources of those risks. Savings.com.au reports that financial markets put the chance of another increase by November at about 50 per cent. Westpac's economists, in the bank's commentary on the decision, say an increase in November cannot be ruled out if inflation accelerates, though their own expectation is that the cash rate stays where it is until the middle of 2027.
A hold does not lower what borrowers are tested against
Under APRA's rules, a lender must check that a new borrower could still repay at an interest rate 3 percentage points above the loan's actual rate. APRA confirmed that buffer on 28 May 2026. Borrowing limits therefore stay where the three rises of 2026 left them.
How the cash rate got here
The August decision is the second hold in a row. The cash rate began the year at 3.60 per cent and was raised in February, March and May, by a quarter of a percentage point each time, to 4.35 per cent. The Board left it unchanged at its June meeting and again this week.
Lenders have passed the increases on. Accountants Daily, reporting the decision, puts average residential mortgage rates at between 5.9 and 6.5 per cent. AAP estimates that the rate rises of the first half of 2026 added about $270 a month to repayments on a $600,000 loan. That increase is already in household budgets, and it is already in the July price figures.
The rate decision changes nothing by itself: repayments on existing variable loans stay as they are, and so does the amount a new buyer can borrow. What it removes, for the seven weeks until the next meeting, is the possibility that either of those gets worse.
Related readHow Queensland home price indexes work, and why they give different numbersWhere Queensland stands
The local numbers published this month show how far the Board's description applies. Cotality puts Brisbane's median dwelling value at $1,104,094, still 14.8 per cent higher than a year earlier. Houses and units fell by 0.6 per cent and 0.4 per cent in July. Regional Queensland's median is $852,037, which is 11.7 per cent higher than a year ago and unchanged over three months.
Five of the eight capitals recorded falls in July on Cotality's index. Sydney and Melbourne led, with declines of 1.4 per cent and 1.2 per cent in the month and 4.0 per cent and 3.4 per cent over three months. Brisbane's three-month change was a fall of 0.6 per cent. Perth, Hobart and Darwin rose.
Nationally the index fell 0.7 per cent in July, the largest monthly fall since December 2022 on Cotality's account, and 1.9 per cent over three months. The Urban Developer, reporting the rate decision for the development industry, notes that high financing costs continue to weigh on the feasibility of new projects as well as on what buyers can pay.
So the Board's description fits Queensland's capital only at the margin. Brisbane is one of the cities where prices have started to fall, but by far less than in Sydney or Melbourne, and from a much stronger year.
The second half of the Board's sentence, on lending, also has a local echo. Broker Daily reported on 3 August that NAB's home lending applications fell 15 per cent over the June quarter. And the supply side has moved: SQM Research counted 20,273 homes for sale in Brisbane in July, 18.0 per cent more than in June, with most of the increase coming from stock that had not sold.
What happens next
The Monetary Policy Board meets eight times a year. Its remaining meetings for 2026, on the Reserve Bank's published schedule, are on 28 and 29 September, 2 and 3 November, and 7 and 8 December.
Between now and the September meeting the Board will see a new round of the figures it mentioned this week. Cotality's August Home Value Index is due at the start of September. The statement makes clear which way the Board is leaning: it describes policy as somewhat restrictive and judges that appropriate while it assesses how the economy responds, with the risks to inflation on the upside.
For sellers, the message of the hold is that the cost of money is not getting cheaper this spring. For buyers, it is that the cost is not getting dearer yet, while the number of homes to choose from is growing. The Board's next statement will be read in Queensland for the same two words it used this time: housing prices.
Kooky, from Shaka
Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.
