Australia’s main housing markets will soften next year even though the Reserve Bank of Australia is likely to hold the benchmark lending rate at 4.35 per cent, economists and housing market leaders said after the central bank left the cash rate unchanged at its last meeting for 2023.

The RBA announced its decision to hold rates with a statement that higher borrowing costs were already working to curb demand, striking a more relaxed tone than observers took from governor Michele Bullock’s last address last month, Barrenjoey chief economist Jo Masters said.