RBA poised for another rate cut? Market eyes August policy direction — Sydney auction clearance rate at 73%

Week’s Key Focus

After unexpectedly holding rates steady and declining to cut last month, the Reserve Bank of Australia (RBA) will announce its latest monetary policy decision on Tuesday, August 12, with markets watching closely to see whether this cycle will deliver another rate cut. Last month’s decision disappointed many mortgage holders hoping for relief, but expectations for a cut have risen again after quarterly inflation data from the Australian Bureau of Statistics (ABS) at the end of July fell within the RBA’s target range.

This week’s RBA meeting will run for two days, with the outcome scheduled for release at 2:30pm AEST on Tuesday. The current cash rate target is 3.85%, which is not the actual interest rate paid by mortgage borrowers, but it does influence all other rates, including lending and deposit rates. Whether banks pass on any change in the cash rate to mortgage customers is up to each lender’s discretion.

The latest figures show headline inflation at 2.1% and the trimmed mean (core inflation) at 2.7% — both within the RBA’s preferred 2–3% range. Headline inflation entered this range as early as September last year, while the trimmed mean only reached it in March this year. As the RBA has long emphasised the trimmed mean as its key inflation measure, this data carries particular weight for policy decisions.

The RBA’s reason for not cutting in July was to “wait for more data.” At that time, monthly inflation data already showed inflation within the target range, but quarterly figures — the RBA’s primary reference — were not yet available. With the new data now released and favourable for rate-cut advocates, speculation is running high. However, even if the RBA lowers the cash rate target, mortgage rates will not fall immediately. Banks typically take a few hours to announce their decisions, and implementation can be delayed by one to two weeks.

For mortgage holders, a rate cut remains uncertain. But if it happens, it could help ease repayment pressures and potentially boost consumer spending and market sentiment. Market watchers will closely examine the language from this RBA meeting to gauge the pace and scale of future cuts.

Auction Results Last Week

Sydney: 726 properties were scheduled for auction, with 458 results reported and 333 sold, delivering a clearance rate of 73%. The total auction value reached $392,742,714, and the median house price was $1,600,000.
Melbourne: 722 properties were scheduled for auction, with 552 results reported and 402 sold, resulting in a clearance rate of 73%. The total auction value came to $329,305,952, and the median house price was $937,000.