RBA’s Secret Numbers Could End the Property Boom Sooner Than You Think [APS097]

You’ve probably seen this headline everywhere: “The Reserve Bank of Australia cuts rates again by 0.25%.” Most people’s first reaction? “Property prices are about to take off!” But this time, it’s not that simple.I went through the RBA’s latest meeting minutes from start to finish and found a few numbers — 2.7%, 2.1%, 2.5% — that seem ordinary, yet they’re quietly redrawing Australia’s wealth map for the next two years. And here’s the important part: between the lines, the RBA hints that once one of these numbers appears, the current rate cut cycle will hit the brakes.

In today’s video, we’ll break down the key takeaways from these minutes — the RBA’s latest inflation forecasts, and the hidden interest-rate timeline behind them. According to the financial markets, the big four banks’ economists, and the RBA’s own outlook, how many more cuts are still to come? And why does this matter for every one of us making financial plans?  What’s even more interesting is a quantitative link I found between rate cuts and property prices. The figure might shock you — but not every rate cut pushes prices higher. In fact, history has recorded three major exceptions. And those exceptions share one thing in common, revealing the real reason why Australia’s housing market is still climbing right now. At the end of the video, we’ll tackle a puzzle that feels contradictory: how can property prices keep rising when the Australian economy is performing so badly? Behind it lies a cause-and-effect chain that most people have never fully understood…

Meeting Minutes

I went through the minutes from the latest RBA policy meeting, and several key points stood out — revealing exactly why they’ve been cutting rates.

Inflation has dropped sharply from its 2022 peak. Back then, rates were pushed to very high levels to fight surging prices, and that pressure worked. In the second quarter this year, the trimmed-mean CPI fell to 2.7%, matching the forecast made in May. Headline inflation dropped to 2.1%, partly thanks to government subsidies like energy bill support — also in line with expectations.

RBA economists now expect the trimmed-mean CPI to keep easing slowly, reaching about 2.5%. And here’s the key point — as inflation falls, interest rates will follow. Reading between the lines, when inflation hits 2.5%, that could well be the moment this rate-cut cycle stops.

On the demand side, the Australian economy is already showing signs of recovery. Real household incomes are rising, debt burdens are easing, and households have more spending power. The question is — will that extra capacity go into savings, or into actual consumption?

The labour market is still tight. In June, the unemployment rate reached 4.3%, but the Q2 average was 4.2% — no clear upward trend, and exactly in line with the RBA’s May forecast. For some industries, hiring remains a challenge.

The RBA’s dual mandate is full employment and inflation in the 2–3% range. By both measures, those goals are now essentially met. That’s why this meeting delivered another 0.25% cut — the third in this cycle.

They also added a caution: if international shocks occur, the RBA could cut rates quickly and repeatedly to cushion the impact. This tells me we’re already past the halfway point of this easing cycle — they won’t deliver too many more cuts now, as they want to keep some firepower for global uncertainties.

In the RBA’s Statement on Monetary Policy (SMP), I spotted one crucial forecast — the trimmed-mean CPI is expected to fall to 2.5% by December 2027. That’s the sweet spot in their 2–3% target range. If inflation behaves as expected, rate cuts may continue, may slow in pace, or may pause for a while — but no hikes. In other words, this easing cycle would end in December 2027.

Of course, this is their projection — and my interpretation. The RBA can be wrong. Over the next two years, a “black swan” could change everything. But if things play out according to script, the current cycle won’t finish for another two years. Which leaves us with the big question — how many more cuts are still coming, and when will they happen?

How Many More Cuts Are Coming

Anytime we talk about the future, we’re making a guess — because no one truly knows what’s ahead. When it comes to predicting rate cuts, there are usually three sources worth paying attention to: the financial markets, the big-bank economists, and the Reserve Bank itself.

Market expectations are for a 0.25% cut this November, another 0.25% in February next year, then rates holding at 3.1% all the way to 2027.

Among the big four banks, opinions vary widely. CBA expects rates to fall to 3.35% by year-end, then drop again early next year — a view shared by ANZ. NAB and Westpac see rates hitting 3.10% by December, meaning two more cuts this year, followed by another early next year.

The RBA’s own forecast is more cautious. In its Statement on Monetary Policy, it signals one cut in November and another around February. My view this time lines up with CBA — a cut in November, another in March, and then it depends on the inflation and employment numbers.

Which brings us to the real question: will these cuts push property prices higher? If this easing phase ends early next year, how long will the housing upswing last?

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Will Rate Cuts Push Housing Prices Higher?

Anyone who’s been around the property market long enough has seen this — as soon as rates drop, prices climb. But is it always that simple?

When interest rates fall, buyers can borrow more from the bank. Loan applications are assessed at a rate about 3% higher than the current one. Lower rates mean stronger repayment capacity. Every 0.25% cut gives an average-income earner about $12,000 in extra borrowing power. If you earn $120,000 a year, that’s an extra $42,000 you can borrow. Lower rates also reduce monthly repayments — so your income stays the same, but you’re paying the bank less, leaving more to spend and stimulate the economy. Or you might save that difference toward a deposit for another property. For investors, lower repayments ease holding costs, making them less likely to sell. Reduced supply puts upward pressure on prices.

Rate cuts also boost buyer confidence, speeding up decisions to enter the market. More buyers mean more competition, and higher prices. As prices rise, owners can refinance, take the equity out, and buy more investment properties — adding further demand. Falling interest also improves rental yields, making buying even more attractive.

The RBA once quantified this link — a 1% cut in rates lifts national average housing prices by about 6.1%. This year’s first two cuts already proved the point: since early 2025, prices have climbed more than 2.7% from just a 0.5% cut.

Cuts affect supply, too. Owners who were under pressure from high rates now get a chance to breathe, so they hold rather than sell or raise their asking price, knowing they can wait. Some struggling owner-occupiers can delay selling altogether. Developers with lower borrowing costs can hold onto land lots until prices rise further. On the buyer side, more cash and higher loan capacity push urgency to purchase. Strong demand plus shrinking supply — prices move up.

But history shows not every cut brings instant growth. In 2008’s subprime crisis, the RBA slashed rates from 7.35% to 3%. Prices plunged for 13 months — down 7.6% — before rebounding in March 2009, then surging 3.5% in Q2, 3.9% in Q3, and 4.6% in Q4.

During the 2011–2012 Euro debt crisis, cuts also coincided with falling prices — until a rebound the following year.

The 2020 pandemic was similar: cuts came first, prices dropped, then two powerful waves of gains followed.

The pattern? All three were crisis-driven cuts. There are two kinds of easing: preventive or adjustment cuts, which tend to push prices up immediately; and emergency rescue cuts, which first see prices fall, then rebound. It’s all tied to consumer confidence — in a crisis, even with lower rates, people may still hold back from buying.

The latest cut is the first kind — preventive — so they’re likely to fuel prices right away.Which raises the next question: if the economy is underperforming, why are Australians still buying? How can prices rise when GDP per capita is falling, overall growth is stalling, and productivity has slipped back to 2016 levels?

Australia’s Economy Is Finished

In its latest Statement on Monetary Policy, the RBA made a rare move — it lowered its forecast for productivity growth and stated outright that Australia’s GDP will absolutely not grow at 2% per year.

In the previous SMP, the RBA expected productivity to grow 1% over the next 12 months. Now, that’s been cut to just 0.7%. A clear signal that they have little confidence in the economy’s outlook. Long term, this means slower growth, weaker consumption, weaker investment, and — unless taxes are raised — a shrinking pool of government revenue.

And right at this critical moment, the ACTU is still pushing for a four-day work week. That’s a 20% reduction in working hours, which means productivity would need to jump by the same amount just to maintain current wealth output. Lifting productivity by 15–20% in the short term? That’s wishful thinking. It’s fair to say there’s a force here in Australia actively dragging the economy backward — and most people can guess what that is.

So, does the economy really matter for housing prices? If growth slows, can prices still rise? The cause-and-effect is something many misunderstand. Rising property prices drive the construction sector — and construction plus related industries make up a huge share of GDP. In other words, housing pushes GDP higher, not the other way around. Australia is deeply dependent on its residential property market. Every $1 invested generates $1.50–$2 in value, not even counting the jobs and employment growth it fuels.

There’s also a link between per-capita GDP and house prices. Since the 1990s, per-capita GDP has risen 85%, but house prices have soared 412%. Yet many could still afford homes — even first-home buyers — thanks to government subsidies and expanding credit. If wages fell short, the government chipped in through tax-funded subsidies, and banks simply created more money to lend for home purchases.

I’ve explained this before: right now, Australia’s positive GDP growth is propped up by immigration. Strip that out, and growth turns negative. The economy rests on the “three Ps” — Population, Participation, and Productivity. Productivity has stagnated for years. Participation surged when women entered the workforce decades ago, but since then, the potential for big gains is gone, and participation is now trending lower as more people live on welfare. That pillar is weakening. Which leaves only population growth — and with locals unwilling to have more children, that means immigration.

So, if GDP is to keep growing, there’s no other real option but to keep boosting migrant intake. I see no reason for sustained cuts to immigration — unless the government actually wants GDP to shrink. And as long as immigration remains strong, housing prices will have upward momentum.

What if Australia suddenly banned immigration? At first, the economy would crash, the RBA would slash rates to stimulate growth, banks would pump out loans, and prices might see a brief spike. But before long, the housing market would slide, dragging the economy down with it. Frankly, I doubt I’ll live to see that storyline play out.

Watch the video version of the blog on YouTube.

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