After holding the cash rate at 4.35 per cent in its three decisions in 2024 so far, the Reserve Bank of Australia has decided to continue to leave the cash rate unchanged.

In a statement, RBA governor Michele Bullock (pictured) said that while inflation has “fallen substantially since its peak in 2022” the pace of decline has slowed in the most recent data.

“Over the year to April, the monthly CPI indicator rose by 3.6 per cent in headline terms, and by 4.1 per cent excluding volatile items and holiday travel, which was similar to its pace in December 2023.

“Broader data indicate continuing excess demand in the economy, coupled with elevated domestic cost pressures, for both labour and non-labour inputs. Conditions in the labour market eased further over the past month but remain tighter than is consistent with sustained full employment and inflation at target. Wages growth appears to have peaked but is still above the level that can be sustained given trend productivity growth. Recent data revisions suggest that consumption over the past year was stronger than previously suggested,” she said.

“At the same time, output growth has been subdued, and consumption per capita has been declining, as households restrain their discretionary expenditure and inflation weighs on real incomes. The economic outlook remains uncertain and recent data have demonstrated that the process of returning inflation to target is unlikely to be smooth.”

In conversation with Lawyers Weekly, Legal Home Loans general manager Aylin Unsal said the RBA’s decision to hold the cash rate this month was “expected” given recent inflation data.

“The hold is good news as it provides stability to borrowers and aspiring home owners. 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.

“If you have been thinking of purchasing soon, we highly recommend obtaining your pre-approval. Getting pre-approved will give you greater certainty of your borrowing potential. When you do find the right home, you can act fast and be in a comfortable position to negotiate on price, knowing your upper spending limit,” she said.

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“Lawyers should know that they have an advantage in this market due to the security of their profession. Many lenders, including some major banks, offer exclusive benefits such as waived lenders mortgage insurance when purchasing with a deposit less than 20 per cent. If you’re thinking of making a move, it’s worth having a conversation to learn more.”