After more than a year of sustained tightening, the RBA Board voted unanimously on Tuesday to cut the cash rate to 3.60%. It’s the third consecutive quarter-point reduction in 2025, taking the total easing since January to 75 basis points.
Governor’s statement showed inflationary pressures have continued to ease, with the trimmed mean rate falling to 2.7% in the June quarter and headline inflation at 2.1% — both broadly in line with forecasts. “With underlying inflation continuing to decline back towards the midpoint of the 2–3 per cent range and labour market conditions easing slightly, as expected, the Board judged that a further easing of monetary policy was appropriate,” the statement said.
The central bank’s updated forecasts assume a gradual easing path for rates over the coming months, although the Board flagged heightened uncertainty in both global and domestic conditions. While US tariff settings have stabilised, global trade frictions remain, and the RBA is prepared to “respond decisively” should international developments materially impact Australia’s economy.
What the cut means for households
For mortgage holders, the immediate question is how much of the 25 basis point cut their bank will pass on. On a $600,000 home loan, a full pass-on would save around $100.00 a month — a small but welcome reprieve for households that have weathered two years of higher repayments.
Rate cuts typically result in improved consumer sentiment, as borrowers see more breathing room in their budgets. That uptick in confidence often flows into higher discretionary spending, giving retailers and hospitality operators a modest lift.
However, cheaper finance can also increase demand in the housing market. Economists note that if buyer appetite strengthens faster than new housing supply can respond, it could add to upward pressure on prices.
Perth property market implications
Perth’s housing market has already been outpacing most capitals, with low stock levels, steady population growth, and a strong labour market underpinning demand. A lower cash rate is likely to encourage more buyers to return to the market, particularly first-home seekers who have been deterred by high borrowing costs.
Auction clearance rates could tick higher in the coming months, and agents expect more competitive offers on quality homes. While the RBA has signalled it will keep a close eye on inflation and employment data, for now, the direction is clear — borrowing is getting cheaper, and that’s set to keep Perth’s property scene busy through spring.
