Inflation Eases, Fueling Expectations for May RBA Rate Cut

The latest inflation figures are in, and they’re setting the stage for a potential shift in interest rates that property buyers will want to pay close attention to.

On 30 April, the Australian Bureau of Statistics (ABS) released its Consumer Price Index (CPI) data for the March quarter. The results show inflation is continuing to ease, increasing the likelihood that the Reserve Bank of Australia (RBA) could move to cut interest rates as early as May.

Key Highlights from the March CPI Data:

• Annual headline inflation remained steady at 2.4%.
• Trimmed mean inflation—which strips out volatile price changes and is the RBA’s preferred measure—fell to 2.9%, the lowest since December 2021.
• This marks the first time since 2014 that both headline and core inflation are sitting comfortably within the RBA’s official 2–3% target band.
• Services inflation, a key driver of core inflation in recent years, dropped to 3.7%, the lowest reading since June 2022. This was largely driven by a cooling in rent and insurance prices.

What This Means for Buyers

With inflation finally under control and trending in the right direction, pressure is mounting on the RBA to begin easing monetary policy. While the RBA has been cautious about jumping too early, the data now provides a compelling case for a rate cut as soon as May.

For homebuyers, this could be good news. A cut to the cash rate would likely lead to lower mortgage rates, increasing borrowing capacity and improving overall affordability—especially for first-home buyers and upgraders who have been sidelined by the high-interest environment over the past year.

Lower interest rates could also re-energize buyer demand, so now might be an ideal time to start preparing if you’re looking to make a move in 2025. Whether you’re getting your finances in order or exploring off-market opportunities, staying ahead of market changes is key.

Final Thoughts

We’re at a potential turning point in the market. With inflation cooling and the RBA signalling a possible rate cut, buyers could soon find themselves in a more favourable borrowing environment. That said, it’s important to act strategically. If a rate cut does occur in May, competition may increase shortly after.

Looking to get ahead of the curve? Let’s chat about your options before the market shifts.