Ausbiz | The Outlook for Home Prices Amid the RBA Rate Hike

Oliver Hume Property Group chief economist Matt Bell features on Ausbiz, discussing the implications of the Reserve Bank of Australia's latest rate hike for the national property market.

Bell notes that the rate rise is set to weigh on property sentiment and pricing in the short term, with a slowing in house price growth already evident ahead of the announcement as buyer and investor expectations shifted. Despite this, he argues that a material undersupply of housing continues to provide fundamental support for prices, with the full impact of previous rate cuts yet to flow through the market. Continued population growth — particularly a potential resurgence in overseas migration — is expected to sustain underlying demand.

On inflation, Bell flags that stronger-than-expected private demand and limited supply capacity in the economy were key factors behind the RBA's decision, and warns that further rate increases could follow, with another possible rise in May if underlying inflation remains elevated through 2026. Sustained credit growth, particularly among investors, adds to the complexity facing the central bank as it works to return inflation to target.

At a regional level, Bell identifies Perth, Brisbane and Adelaide as markets well-supported by constrained land supply, while Melbourne and Sydney remain more sensitive to rate movements. Despite the challenging environment, he expects national home values to maintain positive growth, albeit at a marginally slower pace.

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