RBA Lifts Cash Rate to 4.35%: What It Means for the Property Market

You’ve come a long way and home has been the constant through it all.

The Reserve Bank of Australia has increased the cash rate by 25 basis points to 4.35%, marking the third rise this year. The decision reflects the RBA’s concern that inflation remains too high and is proving more persistent than expected.

Why the RBA Moved

Inflation is still sitting well above the 2–3% target band. Rising energy costs, strong employment, and ongoing pressure across essential services continue to keep prices elevated. With these conditions in play, the RBA is maintaining a firm stance to prevent inflation from becoming entrenched.

Impact on Homeowners

Variable‑rate borrowers will feel the change immediately. A typical mortgage in the $700k–$800k range will see repayments increase by roughly $115–$125 per month. For many households already navigating higher living costs, these incremental rises add up quickly.

Impact on Buyers

Borrowing capacity tightens again. Some buyers may adjust their price expectations or broaden their search areas, but demand hasn’t disappeared. Limited supply continues to support competition for well‑presented, well‑located homes.

Impact on Sellers

Higher rates can soften confidence at the edges, but tight housing supply is still providing a level of support to prices. For sellers, the advantage now lies in presentation, positioning and a smart pricing strategy to attract committed buyers.

Impact on Renters

More people staying in the rental market, combined with higher investor holding costs, continues to place pressure on rents and availability.

Looking Ahead

The RBA has made it clear it will keep pressure on until inflation shows a sustained move back toward target. For now, higher rates remain part of the landscape and adapting to this environment is essential for buyers, sellers and investors alike.