The Reserve Bank has held the cash rate at 4.35% in a widely expected decision despite persistent worries about elevated inflation.

The announcement comes amid a steep decline in property prices in Sydney and Melbourne after three rate hikes earlier this year and major reforms to investor taxes.

Economists and financial markets were unanimous in predicting no change following the latest two-day RBA board meeting, but a fourth hike this year remains on the table as the central bank attempts to complete a long glide-path back to its 2.5% inflation target without triggering a big rise in unemployment.

Inflation eased to 3.8% in June, higher than the RBA’s target of 2% to 3% but below the 4.8% rise the central bank had predicted.

Michele Bullock, the governor, has also said house prices have been falling faster than the RBA expected. Westpac has blamed interest rate rises for a 20% fall in home lending since May.

Carol Kong, an analyst at Commonwealth Bank, said in a note on Tuesday that the RBA could afford to wait and see how severely its past hikes were affecting the economy,.

“Softer inflation and the weakness in the housing market give the RBA scope to assess the lagged effects of earlier tightening,” Kong said.

Bullock will hold her regular press conference at 3.30pm, Sydney time.

More details soon …