Reserve Bank of Australia lifts cash rate to 4.60%: what does it mean for buyers?
On 29 September 2026, the Reserve Bank of Australia increased the cash rate target by 25 basis points to 4.60%. It is the fourth rise this year and takes the cash rate to its highest level since 2011.
For buyers, the rise reduces how much banks will lend and adds to repayments. It also lands in a market that was already adjusting. Prices have eased, stock has built up, and sellers are negotiating more than they have in two years.
Below, we cover what the RBA decided, what it means for your borrowing, what the property market is doing, and how we are advising buyers right now.
Key points
- The cash rate is now 4.60%. Each 0.25% rise adds roughly $150 a month to repayments on a $1 million loan.
- A pre-approval does not lock in your rate or borrowing amount, so check yours with your broker.
- According to Cotality, capital city values fell 3.7% over the three months to August. Vendor discounts across the capitals are the widest in at least two years.
- Good property is still selling quickly. Preparation counts more than timing.
What did the RBA decide, and why?
The Board said inflation remains elevated and that some of the upside risks it flagged in August are materialising. Two drivers stood out in the decision. The conflict in the Middle East has broadened, pushing global energy prices well above what the RBA assumed in its August forecast. Recent Australian inflation also came in stronger than expected.
All nine members of the monetary policy board voted for the increase. The RBA also said it will do what it considers necessary to bring inflation back to target, including raising rates further if needed. Read the full statement on the RBA website.
What does the rate rise mean for your borrowing power?
The first impact is on repayments. Canstar estimates a 0.25% rise adds about $91 a month on a $600,000 loan and $152 a month on a $1 million loan.
The second impact is on how much you can borrow. Banks assess every loan application against a buffer above the actual interest rate. When your rate rises, the rate you are assessed at rises with it. Cotality estimates the four rate rises since February have reduced a median-income household’s borrowing capacity by almost $90,000, a fall of around 9%.
How much room does the bank’s buffer give you?
Every lender regulated by APRA must check that you could still make your repayments if your interest rate were 3 percentage points higher than the rate you will actually pay. APRA confirmed in May 2026 that the buffer remains at 3 percentage points.
At 0.25% per rise, 3 percentage points is the equivalent of 12 rate rises the size of this week’s. Twelve more would take the cash rate to 7.60%, above the 7.25% peak reached in 2008. Nobody can rule out further increases, and the RBA has said more are possible. But if you borrow within your approved limit, your repayments have already been tested at a rate well above today’s.
The bank’s test has limits. It works from your current income and expenses, and household costs tend to rise alongside rates in an inflationary period. So the more useful question is personal. If one or two further rises would put your repayments out of reach, the loan is too large for your circumstances, whatever the bank approves. In that case, change the brief: a different suburb, a smaller property or more time to save. Have that conversation with your broker and your buyer’s agent before you make an offer.
If you have pre-approval. A pre-approval is an indication, not a guarantee. Your lender can reassess serviceability at the new rate when you apply for formal approval. Speak to your broker this week and confirm your pre-approval still covers the price range you are searching in.
If you are about to apply. Set your budget on the assumption that rates stay at this level for some time. Buying with room to spare is far more comfortable than buying at the edge of your capacity.
| Loan size | $600,000 | $735,000Average new loan | $1.2 million | $2 million | $3 million | $5 million |
|---|---|---|---|---|---|---|
| Extra per month | +$98 | +$120 | +$196 | +$327 | +$491 | +$818 |
What is the property market doing?
The rate rise comes after several months of easing. Cotality’s national Home Value Index peaked in March, one month after this year’s rate rises began, and has trended lower since. Its latest data, to August, shows the market adjusting in ways that suit prepared buyers.
Prices have eased, most at the top end
Capital city dwelling values fell 3.7% over the three months to August. The biggest falls have been in higher-priced homes. Upper quartile house values in Sydney and Melbourne are down more than 10% from their recent highs. For buyers at the upper end of the market, this is where the price reset is largest.
Stock has built up
Nationally, total listings are 18% higher than a year ago and above the five-year average. Homes are taking a median of 39 days to sell, up from 28 days a year earlier. Buyers have more time and more properties to compare, which makes it easier to walk away from the wrong one.
Sellers are negotiating
The median vendor discount across the capitals reached 4.2% in the three months to August, the widest in at least two years. On a $1.5 million purchase, that difference between the first asking price and the sale price is around $63,000. Auction clearance rates have held below 50% since early June, so many properties are now selling through negotiation after auction day.
Good property still sells
These are averages. A well-located home with the right layout still attracts several buyers and can sell quickly. What has changed is that ordinary or overpriced stock now sits, which gives buyers clearer price evidence when the right property comes up.
What does this mean for buyers in each capital?
| City | Sydney | Melbourne | Brisbane | Adelaide | Perth | Canberra |
|---|---|---|---|---|---|---|
| EntryLowest 25% of values | −2.1% | −1.3% | −2.0% | −0.9% | −3.0% | −2.0% |
| MidMiddle 50% of values | −4.2% | −3.3% | −2.9% | −1.6% | −3.4% | −2.3% |
| Top endHighest 25% of values | −5.7% | −5.3% | −2.8% | −1.8% | −2.9% | −3.7% |
Sydney
Values are 7.1% below their February peak, and homes take around 45 days to sell. New listings are running well below last year, so choice this spring comes mainly from properties that have been on the market for a while. Those vendors are often the most open to negotiating. Speak with our Sydney team.
Canberra
Values are 5.2% below their May 2022 peak and fell 2.8% over the quarter, with the top end of the market falling fastest. Homes take a median of 51 days to sell, the longest of any capital, and total listings are up around 20% on a year ago. For the many buyers relocating to Canberra from interstate, that means time to compare suburbs properly before committing. Speak to our Canberra team.
Melbourne
Values are 6.8% below the March 2022 peak, with the upper end of the house market falling fastest. Buyers upgrading within Melbourne may find the gap between what they sell and what they buy has narrowed. Speak with our Melbourne team.
Brisbane
Values are still up 10.8% over the year but fell 2.7% over the quarter. Total listings are up more than 50% on a year ago, and the auction clearance rate has dropped to around 33%. After years of competing over very little stock, Brisbane buyers can now compare properties and negotiate. Speak with our Brisbane team.
Sunshine Coast
The Sunshine Coast remains Queensland’s most expensive major regional market, with a median dwelling value of around $1.27 million. Values fell 0.5% over the three months to July but were still up 11.6% over the year. For-sale listings are 11.5% higher than a year ago while sales have barely moved, so buyers have more choice than they have had in some time. Speak with the Sunshine Coast team.
Perth
Values are up 15.6% over the year but have eased over the past three months. Listings have also risen by more than 50%. Homes still sell faster in Perth than in any other capital, at around 22 days, so good properties still move quickly. Speak with our Perth team.
Adelaide
Adelaide has been one of the most resilient capitals, with values up 8.6% over the year and just 1.6% below their May peak. Total listings are up 41% on a year ago, and vendor discounts have widened to 4.0%. Buyers who were repeatedly outbid over the past few years now have more time to assess what they are buying.
Should you wait for rates to fall before buying?
It is a fair question, and for some buyers waiting is the right call. If a higher rate would leave your budget uncomfortably tight, hold off until your numbers work.
For buyers whose finances can absorb today’s rates, waiting has a cost too. Nobody can say with certainty when rates will fall. Cotality’s research director, Tim Lawless, expects demand to stay weak until buyers are confident rates have peaked and cuts are approaching, while noting that ongoing supply constraints should help limit how far values fall. When that confidence returns, so do the buyers who stepped back. February and March are already busy months in most capitals. Buyers who wait for a rate cut often find themselves competing with everyone else who waited.
Our view is simple. If the right property is available at a price you can support at current rates, a softer market with fewer competing buyers is a good time to negotiate.
How a property buyer’s agent helps in this market
A falling market does not make buying easier. It makes buying well more dependent on information and negotiation. Our buyers agent services are built around the work that decides the outcome.
Searching the whole market. Our team searches on-market listings and uses relationships with selling agents to find properties before they reach the portals. Off-market access is never guaranteed. Every property still needs assessing on value, condition and fit with your brief.
Establishing a defensible price. We analyse comparable sales, days on market and a property’s campaign history. That tells you what the property is worth in today’s market, not what the vendor hoped for in February.
Negotiating from evidence. With discounts at their widest in two years, how you negotiate shapes the price you pay. Our expert property negotiation service applies what our team sees across thousands of transactions.
Auction representation. With half of auctions not clearing, bidding strategy and post-auction negotiation both carry more weight. Our auction strategy service covers both.
For buyers who want end-to-end support, our full service covers everything from the brief to settlement.
Frequently asked questions
It can. A pre-approval is not a rate lock or a guaranteed loan amount. Your lender may reassess your borrowing capacity at the new rate before giving formal approval. Check with your broker that your pre-approval still covers your target price range.
It depends on your finances. If current rates would stretch your budget, waiting makes sense. If you can comfortably afford today’s repayments, a softer market means less competition and more room to negotiate, which tends to disappear once rates fall and buyers return.
According to Cotality, national dwelling values fell 3.1% over the three months to August, with the capitals down 3.7%. Cotality expects further declines while rates stay elevated. Conditions vary widely by city and price point. Brisbane and Perth values are still higher than a year ago, while Sydney and Melbourne are lower.
Conditions currently favour buyers. The median vendor discount across the capitals is 4.2%, the widest in at least two years. Homes are also taking longer to sell. The best properties still attract competition, so the discount you can achieve depends on the property.
A property buyer’s agent acts only for the buyer. The role covers searching for property, including before public campaigns, assessing value against comparable sales, negotiating with the selling agent and bidding at auction. Cohen Handler never represents vendors.
Lenders must test your repayments at 3 percentage points above your actual rate, which is the equivalent of 12 rises of 0.25%. That test uses your current income and expenses, so it is a guide rather than a guarantee. If one or two more rises would stretch your budget, consider adjusting your brief and speak with your broker before buying.
A falling market brings more opportunity and more risk. There are more properties to choose from and more room to negotiate. There is also more overpriced stock and more pressure to judge value correctly. Expert buying assistance helps you tell the two apart and negotiate from evidence.
If you are planning to buy in the next few months and want independent representation, speak with Cohen Handler about your search.
Sources: Reserve Bank of Australia, APRA, Cotality Monthly Housing Chart Pack (September 2026), Cotality (29 September 2026), Canstar.