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RBA Lowers Cash Rate to 3.85% Amid Easing Inflation and Economic Uncertainty
In a move welcomed by borrowers and property investors alike, the Reserve Bank of Australia (RBA) has cut the cash rate target by 25 basis points to 3.85%.
Read the official RBA statement here
Increasing Confidence
The decision reflects increasing confidence that inflation is returning to more manageable levels, with annual trimmed mean inflation falling to 2.9%—the first time it’s dipped below 3% since 2021. Headline inflation, now at 2.4%, sits comfortably within the RBA’s 2–3% target band. While inflation is projected to briefly rise as temporary factors unwind, underlying measures are expected to remain stable throughout the forecast period. This marks a critical shift in monetary policy and signals a more balanced risk profile for inflation moving forward.
However, uncertainty still looms large on the global stage. Trade tensions, geopolitical instability, and evolving tariff policies are weighing on the global growth outlook, and Australia is not immune. Although real household incomes have improved and some signs of financial stress have eased domestically, businesses continue to face challenges in passing on costs due to weak demand.
At Capital Properties, we understand that market sentiment can shift quickly. That’s why we work closely with our clients to adapt strategies in real time—leveraging lower interest rates while navigating a fluid economic environment to maximise opportunities in the property market.
Contact us today to learn how we can support your property journey!
