The decision would be a reprieve for the more than 650,000 Queenslanders who hold a mortgage.

But the RBA has also warned that rate hikes could return if conditions changed.

The decision follows ABS data showing the housing market had collapsed and inflation had already peaked and was trending down.

However, RBA Governor Philip Lowe said some households were “experiencing a painful squeeze on their finances”.

He said the RBA board recognised that there was a delayed impact from interest rates hikes imposed so far and the full effect of the 3.5 per cent increase in the past year had yet to flow through.

“The board took the decision to hold interest rates steady this month to provide additional time to assess the impact of the increase in interest rates to date and the economic outlook,” Lowe said.

“The decision to hold interest rates steady this month provides the board with more time to assess the state of the economy and the outlook, in an environment of considerable uncertainty.

“The board expects that some further tightening of monetary policy may well be needed to ensure that inflation returns to target.”

CoreLogic said while a pause did not necessarily mean interest rates hikes were finished, it was likely the tightening cycle was close to topping out.

“While the RBA has left the door open for further hikes, noting “…some further tightening of monetary policy may well be needed to ensure that inflation returns to target”, most forecasts have interest rates either at a peak or almost at a peak with one more hike in the wings,” CoreLogic said.

“The performance of housing values will be an important trend to watch, as they’re a significant contributor to household wealth. If wealth effects from higher housing values trigger more consumer spending, this may have an impact on the trajectory of interest rates.”

SQM Research founder Louis Christopher said his base case now was for Australian house prices to increase between 3 per cent and 7 per cent this year. In Brisbane, that would mean a rise of between 1 per cent and 5 per cent.

Deloitte Access Economics partner Stephen Smith said the decision followed data indicating that “there is evidence the retail sector is in recession” and the recent turmoil in the global banking system had increased the chance of a black swan event shaking the economy.

“Although Australians will approve of today’s monetary policy decision, most will need to keep an eye on the household budget for the remainder of the year,” Smith said.

“Today’s decision will not just be welcomed by millions of mortgage holders struggling under the burden of rising mortgage repayments. Businesses of all sizes, many of which amassed large debts throughout the pandemic, have been struggling with higher interest rates and the deteriorating economic conditions.”

The Real Estate Institute of Queensland chief executive Antonia Mercorella said the decision was appropriate and would allow first home buyers a chance to stabilise their borrowing capacity.

“With loan activity for new builds at 18-year lows in Queensland, the pause will give consumers more confidence to proceed with building their dream homes,” Mercorella said.

Comparison website Rate City said many of the banks were predicting rate hikes would return, however some of the major banks were suggesting there was likely to be only one more increase.

Master Builders said there was now an opportunity for governments to step up with bold fiscal policy decisions to complete the job of bringing inflation back into line.

“We hope governments do not miss this moment for reform in coming state and federal Budgets,” MBA chief executive Denita Wawn said.