Trimmed Inflation Opens the Door for August Rate Cut – what it means for Mortgage Brokers and Property Investors
With inflation now firmly within the Reserve Bank of Australia’s (RBA) target band for two consecutive quarters, hopes are rising that interest rate relief may arrive as soon as August. For mortgage brokers and their investor clients, the implications are both timely and significant.
Inflation Drops into Target – A Turning Point?
New CPI data from the ABS shows:
- Trimmed mean inflation: Down to 2.7% in the June quarter (from 2.9% in March)
- Headline inflation: Eased to 2.1%, its lowest since March 2021
- Services inflation: Fell to 3.3%, the lowest since June 2022
This follows ongoing moderation in prices for rents, insurance, and new dwellings. Crucially, the trimmed mean is the RBA’s preferred inflation measure—used to strip out volatile items and capture the underlying trend.
Rate Cut on the Horizon?
The RBA opted to hold the cash rate at 3.85% in July, pending confirmation that inflation was stabilising. That confirmation, as Westpac’s Luci Ellis noted, has now arrived.
Westpac forecasts a 25bps cut in August, bringing the cash rate to 3.6%, with further cuts likely in November, February 2026, and May 2026.
Why This Matters for Brokers and Investors
- Improved Borrowing Capacity
A rate cut could unlock additional borrowing power—critical for investors looking to act before the next upswing in values. Lower assessment rates may also bring more buyers back into the market. - Market Confidence Rebound
With inflation tamed and rate relief in sight, investor sentiment is likely to shift. Many have been sitting on the sidelines—now is the time to re-engage them. - Rising Demand Before Supply Catches Up
Housing supply remains tight, especially in growth corridors and key investment hubs. A rate cut could reheat demand ahead of any meaningful supply response, putting upward pressure on prices again.
Investor Markets to Watch
With potential rate relief and low inflation strengthening the case for property, here are three markets worth flagging to investor clients:
- Darwin: Strong capital growth potential and affordability.
- Brisbane: A favourite for interstate migration with infrastructure-driven upside.
- Perth: Tight vacancy, rising rents, and population growth continue to drive performance.
Final Thought:
Mortgage brokers are now perfectly placed to guide clients through this turning point. If the RBA acts in August, it may signal the beginning of a new investment cycle—those who prepare early will be best placed to take advantage.
Let your investor clients know: the window to act before the market wakes up may be narrower than it seems.