Perth, June 17: The Reserve Bank of Australia (RBA) has left the cash rate unchanged at 4.35% in June, offering temporary relief to mortgage holders despite growing expectations of further rate rises later this year.
According to Finder’s latest RBA Cash Rate Survey, 97% of the 38 economists and experts surveyed correctly predicted the decision to hold rates. However, more than half (55%) believe the RBA will raise the cash rate at least once before the end of 2026, with nearly two-thirds of those expecting a hike tipping August as the most likely timing.
Finder home loans expert Richard Whitten said homeowners should not become complacent despite the pause.
“Borrowers who have watched their monthly repayments climb this year will view this hold as a moment of calm. But we aren’t out of the woods.
“The cash rate remains at its highest level in years, and our data shows 40% of homeowners were already struggling to pay their mortgage in May – up from 35% in January.
“With more than half of our panel predicting another hike is just around the corner, now is the time to act. If you haven’t haggled with your bank or looked into refinancing since the start of the year, you could almost certainly be getting a better deal,” Whitten said.
The survey also found economists divided over whether the Fair Work Commission’s recent minimum wage increase could contribute to inflation and trigger future rate hikes. Of the 29 experts who responded, 48% said the increase made further cash rate rises more likely, while 52% disagreed.
Nalini Prasad from UNSW Sydney said the decision could cause further hikes.
“Individuals who are on the minimum wage are typically more financially constrained. Giving them more money will increase their spending,” Prasad said.
Adj Prof Noel Whittaker from QUT agreed.
“The wage price hikes hit small businesses particularly hard. And all they can do is raise their prices or reduce their staff numbers. The outcome will be inflationary,” Whittaker said.
However Scott Kuru from Freedom Property Investors shared a different opinion.
“The RBA should recognise that these low-paid workers are just trying to make ends meet and that most of that increase to the minimum wage they receive will be spent on essentials, not optional extras,” Kuru said.
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