RBA Interest Rate Decision – 29 September 2026
The RBA has hiked the interest rate from 4.35% to 4.6% in their September meeting, as widely expected by the market. Today’s decision has marked the fourth time that the rate has increased this year and the highest level since November 2011:
- 3.6% to 3.85% in February;
- 3.85% to 4.1% in March;
- 4.1% to 4.35% in May; and
- 4.35% to 4.6% in September.
The RBA has decided that it is now the time to prioritise tackling persistent inflation, which has remained high despite the interest rate hikes implemented earlier this year.
What changes have led to this interest rate hike?
The good news is that headline inflation has eased with ABS CPI data showing annual inflation moderated to 3.5% in July, which is down 0.3% from the June rate of 3.8%, continuing a persistent downwards trend trending from 4.6% in March 2026. Trimmed mean inflation – excluding volatile items was recorded to be 3.6% in June, up slightly from 3.3% in the 12 months to March 2026.
Both however are still above the 2% – 3% target range; this becoming the main factor that triggered the RBA’s decision today.
ABS data shows unemployment has risen to 4.6% in August 2026, up 0.1% from 4.5% in July. Despite marginal, the increase suggested earlier rate increases are now flowing through to the broader economy.
This is reducing pressure on wage growth, helping to cool input costs and moderate the price growth of goods and services.
The Board also assessed that there is still real uncertainty in the peace deal between the U.S. and Iran: crude oil prices have been trending up since July, currently reaching US$93 per barrel as of today 29/9/2026.
Retail petrol prices have also jumped when the excise tax was ended in August 2026, coupled with more intensive conflicts in the Iran – U.S and Ukraine and Russia wars. There are currently no further extensions of the petrol and diesel excise reliefs, with petrol prices predicted to continue climbing towards the end of the year.
What does this mean for property investment?
As interest rates and petrol prices increased, this has created flow-on effects for other everyday living costs. We assessed that the impact is likely to differ across market segments.
- Premium established segments: Prices are expected to find a floor and gradually stabilise through the remainder of 2026. This is because the removal of negative gearing has a greater impact on the holding costs of higher-value properties.
- Brand-new properties in tightly supplied markets: This segment is expected to remain comparatively resilient. Ongoing structural housing undersupply continues to support demand, while the retention of negative gearing eligibility and the capital gains tax discount for investors is likely to channel additional investment into new housing stock. In these markets, vacancy rates remain structurally low, mostly below 1%, amid ongoing challenges in delivering new housing and continued population growth.
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