Yesterday's decision by the Reserve Bank of Australia to leave the official cash rate on hold at 2% is a sensible move.

With the move by the big four banks to lift variable mortgage interest rates, slowing inflation levels and the clamour to talk down the Sydney and Melbourne property markets, a rate cut was a possibility in the minds of some economists.

However the RBA governor doesn’t strike me as someone who spooks easily, and the RBA has taken the sensible move to check more local and international data before tweaking the monetary policy levers again.

On the plus side, the lower Australian dollar is doing some of the RBA’s work for it, while recent business data suggests the manufacturing sector is enjoying a burst of good health. We are also seeing signs that property markets in Northern Australia and South East Queensland are starting to attract more southern state investor capital.

Talk that the Sydney real estate market is tanking is wide of the mark. Real estate markets in Sydney are returning to a more normal market where we might have 2 or 3 committed bidders at auctions rather than the situation a few months back where the fear of missing out (FOMO) saw more like 6-8 groups jostling for the prize.

We often forget that each vendor only needs to attract one buyer for a property to transact and there are still plenty of committed buyers in the market for quality, well-located Sydney real estate – it’s just that they feel they have more time to make a decision.

We are also seeing that those vendors who are working with a good agent, are being more realistic about their price expectations.

Long-term, I'm confident Sydney real estate will continue to produce excellent returns for owner-occupiers and investors. Take the Australian Population Research Institute findings2 that were released yesterday, indicating that Sydney will need an extra 309,000 homes in six years’ time.

Lack of stock will continue to underpin long-term values in Sydney, and Melbourne too for that matter, as both cities are the engine rooms of the Australian economy and also great places to live.