Rate cut hopes mounting for May, says REIQ

The Real Estate Institute of Queensland (REIQ) has acknowledged today’s decision by the Reserve Bank of Australia (RBA) to keep the cash rate on hold at 4.1% in April, pending the release of the comprehensive March quarter CPI inflation data on 30 April.

REIQ CEO Antonia Mercorella said it was widely expected that the RBA would hold in April, and it would have been a surprise if it had cut the cash rate, however now hopes were mounting for May’s decision.

“After holding in April to gain more confidence inflation is under control, many home buying hopefuls and mortgage holders will be hoping the RBA will consider an additional cut to the cash rate in May,” Ms Mercorella said.

“The latest monthly inflation data confirms that inflation is back in the RBA’s target band, which is encouraging news for consumers and businesses alike.

“Households would welcome additional relief after suffering a significant fall in real disposable income over the last two years.

“There have been signs of sluggishness in the private sector economy, and a rate cut would help improve the outlook for businesses.

“Additional rate cuts are required to lift consumer confidence and borrowing capacity. They also stimulate additional demand and construction of new housing which is sorely needed.”

Ms Mercorella said housing approvals data (the home building pipeline) suggest Queensland and Australia will fall short of national housing targets.

Over the twelve months to the end of January 2025, around 35,800 dwellings were approved for construction in Queensland.

“This is well below the approximately 49,300 dwellings Queensland needs to build each year to do our fair share to meet the national housing target of 1.2 million new homes over five years,” she said.

ENDS

¹ As of 28 March, futures market pricing implied only an 8% chance of a cut in the cash rate in April. https://www.asx.com.au/markets/trade-our-derivatives-market/futures-market/rba-rate-tracker

² According to the monthly CPI data, annual inflation to February 2025 was 2.4% and the core inflation measure (the trimmed mean) came in at 2.7%. Monthly Consumer Price Index Indicator, February 2025 | Australian Bureau of Statistics

³ Through the year to December quarter 2024, GDP growth was a lacklustre 1.3%, and GDP per capita fell 0.7%. Australian National Accounts: National Income, Expenditure and Product, December 2024

⁴ Building Approvals, Australia, January 2025 | Australian Bureau of Statistics.

⁵ Queensland’s share is calculated by multiplying the annual national target of 240,000 (i.e. 1.2 million over 5 years divided by 5) by Queensland’s share of national population (20.54%) based on National, state and territory population, September 2024 | Australian Bureau of Statistics.