A further boost to already improving sentiment in property markets has been put on hold

As widely expected, the RBA has left the official cash rate on hold at 4.1%, following a cut of 25 basis points in February, from 4.35% to 4.1%.

Knight Frank’s Chief Economist Ben Burston said: The decision to hold rates steady today was widely anticipated and indicates that the RBA wants to see firmer evidence of declining inflation in the full Q1 data release in late April.

“However, the recent monthly data offered plenty of encouragement with easing pressures in key services items such as insurance and housing rents where inflation had persisted for longer.

“As such, there remain strong prospects that the full Q1 CPI release later this month will pave the way for another cut in May that would add a further boost to already improving sentiment in property markets.

“Since the first rate cut in February, we have witnessed a broadening in investor demand and with further cuts in prospect, investors still on the sidelines will increasingly come to the view that the Australian market now represents good value with strong prospects for cyclical recovery.”

Knight Frank’s Australian Horizon 2025 report launched at the end of last year predicted that the Australian commercial property market would experience a recovery from the middle of this year, with a return to growth.

Well-located core assets in Sydney are expected to lead growth, with industrial first, followed by prime CBD offices.

The Knight Frank report found the strength of the cyclical market recovery will be guided by the extent of interest rate cuts once the RBA started easing monetary policy.