Further interest rate hikes could ‘devastate’ property market without easing unaffordability
News Source
•Mon, 28 Sep 2026 15:00:36 GMT
📰 What Happened
The Reserve Bank is expected to raise the cash rate to 4.6% on Tuesday, up from 4.35%. For a $700,000 loan, the rise would add about $100 to the monthly interest bill.
Economists say two or three more rate rises would be devastating for the property market. Even so, housing would stay less affordable than ever. Higher loan costs would cancel out lower house prices.
Analysts expect another rise on Melbourne Cup day. Markets even see a 60% chance of a sixth increase by mid-2027.
🔍 The Backstory
The Reserve Bank raises rates to fight inflation. High inflation means everyday prices keep climbing. Lifting interest rates makes borrowing costlier, which cools spending.
The bank has already raised rates several times this year. Petrol prices are also rising, heading towards $2.40 a litre. One chief economist said more rate hikes would be overkill given how weak the economy already is.
🎯 Why It Matters
Higher rates mean bigger mortgage payments for many families. They can also push rents and business costs up, making life harder for ordinary people.
The Reserve Bank is expected to raise the cash rate to 4.6% on Tuesday, up from 4.35%. For a $700,000 loan, the rise would add about $100 to the monthly interest bill.
Economists say two or three more rate rises would be devastating for the property market. Even so, housing would stay less affordable than ever. Higher loan costs would cancel out lower house prices.
Analysts expect another rise on Melbourne Cup day. Markets even see a 60% chance of a sixth increase by mid-2027.
The Reserve Bank raises rates to fight inflation. High inflation means everyday prices keep climbing. Lifting interest rates makes borrowing costlier, which cools spending.
The bank has already raised rates several times this year. Petrol prices are also rising, heading towards $2.40 a litre. One chief economist said more rate hikes would be overkill given how weak the economy already is.
Higher rates mean bigger mortgage payments for many families. They can also push rents and business costs up, making life harder for ordinary people.