Economists are tipping the Reserve Bank to cut the official cash rate by 25 basis points to 3.85 per cent, when its two-day meeting wraps up on Tuesday.
Should the central bank cut rates, it would be only the second time in almost five years that interest levels on mortgages have been reduced.
Finance Minister Katy Gallagher noted homeowners would be watching the bank's decision closely, adding that a fall in inflation levels was a positive sign.
"We know inflation has come back into band ... and that is a welcome progress that has been made over the last two years," she told ABC TV on Tuesday.Â
"We know that has been hard for households."
Sonali Saluja recently settled her first property purchase: a three-bedroom, two-bathroom house in Geelong costing $586,000.
The 38-year-old senior school administrator, who moved to Australia from India in 2008 to study business at university, is delighted to have secured her "dream house" before rate cuts potentially drive prices even higher.
"If I were not into the property market, that would have been scary because there would be the bull rush now that's possibly going to happen after the rate cuts," she told AAP.
"And then you just have to settle on the property that you'd get, basically, and not what you want. So I'm really lucky to have found something that I wanted."
Inflation for the March quarter remained steady at 2.4 per cent, while underlying inflation, which removes volatile price movements, dropped to 2.9 per cent.
Both measures are within the Reserve Bank's target band of two to three per cent.
Nicola Powell, chief economist at property portal Domain, said an interest rate cut was pretty much a given.
As well as moderating inflation and sluggish consumer spending, US President Donald Trump's tariffs have bolstered the case for a cut to support the Australian economy, amid an anticipated global slowdown.
"Obviously, it's going to be at the forefront of their mind, the impact that that is going to have on the domestic economy," Dr Powell told AAP.
Despite the progress on inflation, prices remained high, Senator Gallagher said.
"Some of those really high peaks in inflation really hit household budgets, and people felt it when they went to the supermarket, when they paid their bills," she said.
"We get the job isn't done either and that we've got to continue our focus, not only on inflation but also on productivity on that side of the economy over the next couple of years."
Money markets and most economists agree the central bank will cut rates by 25 basis points.
That would result in the median mortgage holder with a $600,000 debt having to pay about $90 less per month in interest repayments, assuming the banks pass it on in full.
Dr Powell said she would be surprised if they didn't, given that competition among the banks for customers and new loans was high.
If the RBA did slash rates by 100 basis points - or 75 as the market is predicting - by year's end, house prices are likely to surge.
Increased borrowing capacity for home buyers will cause demand to rise, and with the provision of new supply still hampered by high construction costs and planning bottlenecks, prices will follow, Dr Powell said.
Given the widespread expectations of a rate cut, market attention will turn to the Reserve Bank's statement and governor Michele Bullock for signs of where the board is likely to go next.
How much Ms Bullock pushes back on market pricing of the cash rate, as she did following the February decision, will feed into investor confidence of further cuts.
