The RBA lifted the cash rate by another 25 basis points to 4.60% on 29 September, its fourth hike of 2026 and the highest rate since 2011. Here is what that means for the property market right now.
Borrowing capacity drops again. Every rate rise tightens what buyers can borrow, and that flows directly into how much they are willing or able to spend. Confidence takes another hit across both investors and owner-occupiers, and some buyers on the fence will sit on their hands for a bit longer.
What gets hurt most:
Investor-led markets, where the numbers were already tight and the yield math gets harder with every rate move
The premium end of the market, where buyers are more leveraged and more sensitive to sentiment shifts
Anyone who bought at the peak with minimal buffer
What holds up:
Owner-occupier markets with genuine underlying demand, people still need to live somewhere
Affordable regional markets where the entry point is low enough that the rate impact is manageable
Well-located properties with strong rental demand, landlords are still in a strong position with vacancy rates where they are
Here is the honest take:
Right now is actually a good time to buy. Reduced competition, motivated vendors, and a market where you can negotiate. But go in with clear eyes. Strong capital growth in the next 12 months is unlikely. This is a market you buy into for the medium to long term, not to flip in six months. If your strategy is sound, your numbers work at these rates, and you are buying in the right location, a rate hike does not change the fundamentals of a good investment. It just removes the weak hands from the market and leaves room for the disciplined ones.
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