The Buyer Read: Midweek Market Update - 29 April 2026
- Apr 29
- 5 min read
The Q1 CPI numbers are in - underlying inflation held, not accelerated. Here's what that means for buyers.
The March quarter CPI landed this morning.
Headline inflation rose 4.6% in the year to March 2026. More importantly, the trimmed mean - the underlying measure the RBA actually focuses on - held at 3.3% annually, unchanged from the previous quarter.
The RBA hiked the cash rate to 4.10% in March, reversing the cuts that ran through 2025.
The question heading into today was whether underlying inflation had re-accelerated, which would have all but confirmed another hike at the 5 May meeting.
It didn't accelerate.
That's moderately positive for buyers. The trimmed mean, at 3.3%, removes the clearest argument for an immediate follow-up hike - though at 3.3%, inflation is still above the RBA's 2–3% target band, so the picture isn't fully resolved.
What mattered this week
Q1 2026 CPI: headline up, underlying steady
The ABS released the March quarter Consumer Price Index this morning.
Headline annual inflation came in at 4.6% - elevated, but largely driven by energy and fuel costs rather than broad demand-side pressure.
The trimmed mean, which strips out volatile items and is the RBA's preferred measure, held at 3.3% annually. It didn't rise. It didn't fall sharply either.
Before the data, markets were pricing roughly a 60% chance of a 25bp hike at the 5 May meeting.
Westpac had been forecasting a hike, conditional on stubborn inflation.
The unchanged trimmed mean shifts the balance slightly toward a hold - but this is still a genuinely close call.
The Board has more room than it did yesterday morning, but there is no clear mandate to move.
The RBA's reversal
The cash rate is at 4.10% after the March hike, up from the lows of the 2025 cutting cycle.
The cause is a combination of sticky domestic inflation, higher global fuel and input costs, and a geopolitical backdrop that kept oil prices elevated.
The Bank of Japan held rates this week but raised its inflation forecast, citing ongoing geopolitical risks - a reminder that global inflation isn't a purely domestic story.
Buyers who returned to the market through 2025, expecting the cycle to remain accommodative, now face a materially different borrowing environment.
Pre-approvals that held comfortably at lower rates need to be tested against 4.10% - and potentially 4.35% if the May meeting goes against expectations.
US tariffs: contained but still feeding inflation
Australia faces a 10% baseline tariff on goods exported to the US - manageable relative to countries facing higher rates and not a direct housing-market driver.
But the broader tariff era has slowed global growth and kept inflation persistent across most major economies.
The US Supreme Court struck down the higher reciprocal tariff rates in February 2026, providing some relief.
However, global trade uncertainty continues to feed into the inflation story that central banks are still working through.
What it means for property buyers
Today's result provides some relief on the rate front. If the trimmed mean had accelerated, a May hike would have been close to certain.
With it holding steady, the Board has room to pause and assess.
That's not a guarantee of a hold, but it does reduce the probability of an immediate further tightening.
For borrowing capacity, the picture is unchanged for now - 4.10% is still the rate lenders are assessing against.
If the Board holds in May, that gives buyers more stability in their pre-approval numbers over the next two months.
If it hikes, serviceability buffers tighten further.
In the Illawarra, conditions remain relatively stable.
Tight supply, persistent lifestyle demand, and a meaningful price gap with the Sydney metro continue to support the local market.
Wollongong's median house price sits at around $1.26 million.
If Sydney softens and the Illawarra holds, the relative value case strengthens rather than weakens.
Fewer confident buyers in the market does create more negotiating room. More properties are passing in at auction in some markets.
For buyers with clear pre-approval and genuine intent, those conditions are worth understanding rather than avoiding.
What buyers often get wrong
Today's result will prompt two opposite overreactions.
Some buyers will take it as a signal that rates are about to fall and confidence is restored.
Others will dismiss it because the headline CPI is still 4.6%.
Both miss the point.
Underlying inflation holding steady is a stabilising signal, not a reversal.
It means the worst-case scenario-an accelerating cycle-is less likely right now.
It doesn't mean the RBA is done, rates are heading down, or that the property market has been given an all-clear.
The other common error is treating a national rate signal as a signal about the value of a specific property.
It isn't.
Rates affect borrowing capacity and general demand.
They don't determine whether a particular property in a particular suburb is fairly priced or well-positioned
Higher rates reduce competition from buyers operating at the edge of their capacity.
They don't remove demand from buyers with equity, savings, or long-term intent.
Those buyers remain in every market.
What I'd pay attention to next
5 May RBA decision - with the trimmed mean unchanged, a hold is plausible.
But the Board has been willing to move when inflation stays above target, and 3.3% is still above target.
Watch for the Statement on Monetary Policy language, not just the rate outcome.
The Board's forward guidance will matter more than the single decision.
Westpac's extended forecast - before today's data - had flagged hikes in May, June, and August, with a peak around 4.85%.
Today's result may prompt a revision.
Watch for updated bank forecasts over the next 48 hours - they'll signal whether the market view shifts materially toward a pause.
Sydney price movement - if Sydney continues to soften, the flow of buyers looking at regional alternatives tends to increase.
Illawarra supply and demand are partly a function of what's happening 80km north.
Our view
The Q1 CPI result is better than the worst-case scenario buyers feared. Underlying inflation not accelerating matters - it reduces the pressure on the Board to keep moving.
That's a meaningful shift in the risk picture.
But 3.3% trimmed mean is not 2.5%.
The RBA's job isn't finished.
A hold in May is possible, a further hike is still on the table, and cuts remain some way off.
Buyers should plan their finances around the current rate environment, not an anticipated one.
The Illawarra holds relative value in this environment.
Supply is tight, demand is structurally supported, and the price gap with Sydney remains real.
For buyers with genuine intent and a clear financial position, today's data doesn't change the fundamentals of a good purchase - it just removes one layer of near-term uncertainty.
Final takeaway
Today's data is a stabilising signal, not a turning point.
The trimmed mean holding at 3.3% reduces the probability of an immediate May hike - but doesn't resolve the rate cycle.
The 5 May decision is still live.
The most useful thing you can do before then is know your borrowing ceiling, understand what current conditions mean for negotiation, and have a clear view of what you're buying before you move.
If you want a clear read on what current conditions mean for your buying position in the Illawarra, talk to us directly.
This article is general information only. It does not constitute financial, investment, or property advice and does not take into account your personal objectives, financial situation, or needs. Property markets involve risk. Before making any property decision, seek independent professional advice.
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