In a statement, RBA governor Michele Bullock (pictured) said that the decision reflected the board’s view that progress in bringing inflation back to the target range of 2 to 3 per cent was looking slower than earlier forecast.

“While the economy has been experiencing a period of below-trend growth, it was stronger than expected over the first half of the year. Underlying inflation was higher than expected at the time of the August forecasts, including across a broad range of services,” she said.

“Conditions in the labour market had eased but remained tight. Housing prices were continuing to rise across the country, as was the number of new mortgages. Given this, the board judged that the risk of inflation remaining higher for longer had risen, and an increase in interest rates was therefore warranted to be more assured that inflation would return to target in a reasonable time frame.”

“The limited information received on the domestic economy since the November meeting has been broadly in line with expectations. The monthly CPI indicator for October suggested that inflation is continuing to moderate, driven by the goods sector; the inflation update did not, however, provide much more information on services inflation. Overall, measures of inflation expectations remain consistent with the inflation target,” Ms Bullock continued.

“Wages growth picked up in the September quarter, but this was expected given that it captured the earlier Fair Work Commission decision on award wages. Wages growth is not expected to increase much further and remains consistent with the inflation target, provided productivity growth picks up. Conditions in the labour market also continued to ease gradually, although they remain tight.”

In conversation with Lawyers Weekly, Legal Home Loans general manager Aylin Unsal said that the mortgage broking firm is “not surprised” by the RBA’s decision to pause the cash rate this month, given recent ABS data revealed that inflation is heading in the right downward direction.

“Currently, the average interest rate range we are seeing for residential loans is approximately 6.0–6.9 per cent, depending on the product, lender and customer borrowing profile,” she explained.

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“You may be relieved to hear that we could be at the apex of the rate hikes. CBA, Westpac, and ANZ believe that the cash rate will remain on hold at 4.35 per cent. However, NAB has once again tipped another increase could be on the horizon, peaking at 4.60 per cent. All four majors, however, do predict that the rate will start dropping towards the end of 2024, hopefully providing some much-needed relief to mortgage repayments after a long feat of hikes.”

Market activity “certainly ramped up” in the spring season, Ms Unsal continued.

“Auction clearance rates are higher across all capital cities compared to this time last year. If you’re thinking of purchasing soon, we recommend obtaining your pre-approval. This will give you more certainty on your borrowing power and ensures you won’t overspend at auction,” she advised.

“Lawyers should know that their advantaged position with lenders has not changed despite the rate rises. Exclusive benefits, such as waived lenders mortgage insurance when purchasing with a deposit less than 20 per cent, are still very much available.”