RBA Deputy Governor: Rates May Not Be High Enough — Housing Market Frozen by Uncertainty

RBA Deputy Governor: Rates May Not Be High Enough — Housing Market Frozen by Uncertainty

Reserve Bank of Australia Deputy Governor Andrew Hauser made a notable admission on 16 April 2026, telling an international finance forum that the RBA board is "not fully convinced" that the current cash rate of 4.10% is restrictive enough to bring inflation sustainably back to target. The comment, reported by The Adviser, comes ahead of the next monetary policy decision scheduled for 5 May 2026.

What Hauser Said

Speaking at the Institute of International Finance Global Outlook Forum in Washington D.C., Hauser acknowledged that despite the March 2026 rate hold, ongoing uncertainty — particularly around global trade tensions and domestic inflation stickiness — means the board has not ruled out further tightening.

Key points from his remarks:

• The RBA is watching inflation data closely; CPI sits at 3.7% annually as of February 2026, still above the 2-3% target band
• Unemployment remained steady at 4.3% in March 2026, according to ABS data released the same day
• Global fragmentation and deglobalisation are creating new inflationary pressures that central banks are still learning to model

It Is Uncertainty, Not Rates, That Is Stalling the Market

Separately, analysis from Australian Broker published 16 April 2026 found that buyer hesitation in Australian property markets is driven less by the current rate level and more by policy uncertainty: uncertainty about the federal election outcome, future rate movements, and potential tax reforms including changes to capital gains tax and negative gearing.

This distinction matters for borrowers:

• Those waiting for rate cuts before buying may be waiting longer than expected
• A prolonged hold — or even a further increase — remains on the table according to the RBA's own communications
• Market sentiment is suppressing transaction volumes even as borrowing costs have stabilised

What This Means for Different Borrower Types

For self-employed borrowers and business owners — a key segment of MPFG's client base — the combination of sticky inflation, a cautious RBA, and policy uncertainty underscores the importance of having financing structures that can accommodate rate movements. Alt Doc loans from non-bank lenders offer flexibility that standard bank products do not.

The May Decision

The next RBA cash rate decision is due 2:30 pm AEST on 5 May 2026. Markets are currently pricing in a low but non-trivial probability of a further rate increase before any cut. Borrowers approaching settlement or refinancing in the next 60 days should stress-test their repayment capacity at rates 25-50 basis points higher than today.

Key Takeaway

The RBA has signalled it is in data-dependent mode and is not confident rates have peaked. At the same time, uncertainty — not rate levels — is the dominant force paralysing buyer decision-making. Borrowers who act on clear financial information rather than waiting for perfect conditions are best positioned in this environment.

This article is general information only and does not constitute financial advice. MPFG Capital holds ACL 553698. Lending criteria, terms, and conditions apply.