April's Selected Price Indexes provided the breathing room the Committee needed to hold. With petrol now 30.1 per cent higher than a year ago and diesel up 91.3 per cent, the full pass-through into transport, food, and business costs has not yet materialised. Today's hold is a judgement that the data did not yet compel action rather than a signal that rates are staying put.
The current situation differs materially from 2022, when supply disruptions struck an economy with strongly growing demand. Demand today is weak and unemployment remains elevated, which limits how far cost pressures can spread into wages and services prices.
The housing market arrived at today's decision already under pressure. The national median fell 1.8 per cent in April to $775,000, easing from March's $790,000 in the usual seasonal pullback driven by school holidays, Easter, and shorter days. Annual growth slipped to -0.6 per cent, well short of the 3.2 per cent recorded in February, which had briefly signalled the possibility of a sustained recovery.
The more telling shift is in sentiment. Buyer confidence has softened noticeably in recent months, and banks had already begun lifting fixed mortgage rates ahead of today's meeting. Two-year rates rose around 20 basis points since the Middle East conflict began. The effective cost of borrowing has been rising regardless of where the OCR sits.
The question is now firmly about timing rather than direction. For buyers and borrowers, the window ahead of a rising rate environment is narrowing.
