Following the rate cuts in February, May, and August, there was speculation that the Reserve Bank had done enough heavy lifting for 2025 and that any further reductions to the cash rate would likely be pushed into the new year.

The latest jobs data, however, has financial markets buzzing that a Melbourne Cup Day rate cut is now odds-on. According to figures released on 16 October by the Australian Bureau of Statistics (ABS), the seasonally adjusted unemployment rate rose to 4.5% in September, up from a revised 4.3% in August[i].

Sean Crick, ABS Head of Labour Statistics, said, “This is the highest seasonally adjusted unemployment rate recorded since November 2021.”

But that still means we’re operating in a relatively tight labour market. To put it in context, unemployment was at 5.1% in December 2019, just before the COVID-19 pandemic hit.[ii]

That aside, the financial markets are alive with speculation, now pricing in roughly a 70% chance of a rate cut when the RBA next meets just an hour or so before the thoroughbreds hit the turf for the race that stops the nation[iii].

Craig Betalli, Senior Finance Specialist at Our Broker, says the economy’s resilience is remarkable given the way the RBA pushed rates up rapidly between May 2022 and November 2023. “As a consequence, we saw mortgage interest rates rise to around 6.5%.

“However, unemployment didn't really shift until now,” he explains. “That tells you the broader economy is still pretty strong.”

He continued, “That said, if the CPI figures due on Wednesday, 29 October, show that annual underlying inflation has eased again, it will add further pressure on the RBA to trim the cash rate to 3.35% on Melbourne Cup Day.”

If this happens, the potential for a rate cut on the first Tuesday in November could light a fire under the housing market. “If the RBA cuts, it’ll definitely turbocharge activity,” Craig says. “You’d expect a late run on the spring market right through to Christmas.”

He adds that lower borrowing costs encourage both buyers and sellers to act. “When rates come down, it motivates everyone, first-home buyers, upsizers, and downsizers to make a move.

“People who’ve been sitting on the fence tend to get proactive. They’ll buy that next property and then put their own on the market, which drives more listings and transactions.”

So, the takeaway is that even as markets speculate about a rate cut, Craig says the fundamentals remain encouraging. “There’s still plenty of activity in the property market, and we’re seeing strong demand for loans.

“If a cut comes, it’ll just add some additional heat to an already competitive market.”

Thinking about buying a property? For expert home loan advice, contact Our Broker on 1800 913 677.

If you’re considering listing a property this spring, contact your local Raine & Horne agent today.

[i] https://www.abs.gov.au/media-centre/media-releases/unemployment-rate-45

[ii] https://www.abs.gov.au/articles/trend-unemployment-rate-ends-2019-51

[iii] https://www.abc.net.au/news/2025-10-16/asx-markets-business-news-live-updates/105897694