August 2026 · Issue #3
The RBA holds at 4.35% — what a second pause actually signals
The Reserve Bank has left the cash rate at 4.35% for a second consecutive meeting, after three increases earlier this year. That is a shift in tone. It is not the same thing as relief.
A second hold suggests the balance of risks may be turning. It is not confirmation the tightening cycle is finished, and it is a long way from a cut.
The inflation picture explains the caution. Headline inflation eased to 3.8% in June, which is progress. But the trimmed mean — the underlying measure the Bank actually steers by — held at 3.6%, still above target. Unemployment sits at 4.4%. That combination gives the Bank room to wait and very little reason to move.
Where things stand
| Cash rate | 4.35% |
| Consecutive holds | 2 |
| Rises earlier this year | 3 |
| Headline inflation (June) | 3.8% |
| Trimmed mean | 3.6% |
| Unemployment | 4.4% |
What this year’s rises already did
The three increases earlier in the year added just over $350 a month to repayments on the average new owner-occupier mortgage of $735,000. They also cut borrowing capacity for a median-income household by roughly 7% — more than $53,000 of purchasing power.
$53,000 less to spend is not a rounding error. It is the difference between two suburbs.
Both Domain and Cotality expect rates to stay elevated, with the first cut unlikely until well into 2027. If you have been waiting for cheaper money before you act, that is a long wait on someone else’s timetable.
The Redlands read
Why this matters more here than the headline suggests
A 7% cut to borrowing capacity does not hit every price bracket evenly. It bites hardest exactly where the Redlands has the most stock — the mid-market, where buyers are borrowing near their limit rather than trading down from a big sale.
What I am seeing on the ground fits that. Enquiry volumes are holding up well; conversion to inspection and offer is where things slow. That is the signature of buyers who are interested but constrained, rather than buyers who are absent.
For sellers, the practical effect is that your buyer pool at any given price is thinner than it was, and pricing accuracy matters more than it has in years. A home priced $50,000 too high is not sitting slightly above the market — it has stepped outside what a whole tier of buyers can now borrow.
For buyers, the flip side: the people you are competing with are constrained too. That is why the negotiating room described elsewhere in this issue exists.
The takeaway
Trying to time an interest rate cycle is a poor use of anyone’s energy, and the record of people who attempt it is not encouraging. What you can control is what you buy, what you pay for it, and how much buffer you leave yourself. Those decisions have outlasted every rate cycle I have worked through.
Want to know what tighter borrowing capacity has done to the buyer pool for your home? Ask me.
What’s mine worth?
Greg Leigh — local Redlands specialist, Queensland Sotheby’s International Realty. Published 12 August 2026.
Sources: Reserve Bank of Australia cash rate decision; ABS inflation and labour force data; Domain and Cotality rate outlooks, reported by Property Update (12 August 2026), via Real Estate Weekly.