RBA Rate Rise Likely to Delay Property Recovery, Says Oliver Hume's Matt Bell

Elite Agent Digital Editor Catherine Nikas-Boulos gathered reaction from leading property economists and industry figures after the Reserve Bank lifted the cash rate by 25 basis points to 4.60 per cent on 29 September 2026, its fourth increase of the year. Oliver Hume Chief Economist Matt Bell was among the experts featured, saying the latest RBA rate rise changes the outlook for property significantly compared to where we were one month ago.

How the RBA Rate Rise Affects Borrowing Capacity and Buyers

Elite Agent reported that the decision puts fresh pressure on borrowing capacity just as the spring selling season enters one of its busiest periods. The article noted buyers face a further reduction in what they can borrow, agents are likely to see more price-sensitive purchasers and vendors may need to adjust expectations. BresicWhitney CEO Will Gosse said someone who could borrow $1.5m before this year's four rises can now borrow about $1.37m, while The Agency's Cameron Kusher noted the cash rate is now at its highest level since October 2011.

Conditions were already softening. LJ Hooker Head of Research Mathew Tiller cited Cotality figures showing 1,428 properties were scheduled for auction nationally the previous weekend, with a combined capital city clearance rate of 50.3 per cent. Several contributors said tight housing supply and life-driven sales should keep properties changing hands, reducing the risk of a major downturn.

Oliver Hume's Outlook for the Australian Property Market

Bell said markets had largely moved to fully expecting the decision, noting that only one month earlier a further rise was viewed as a 50 per cent chance. He said the hike, and the possibility of another, supports Oliver Hume's view that the Federal Budget taxation changes were not the main factor driving property markets.

Because rate changes can affect property markets up to 6 to 9 months out, Bell said any recovery has probably been pushed out to mid-year at the earliest, although some markets will return to growth before then. He added that small rebounds in sentiment and auction clearance rates have stalled, and monthly falls in established prices of around 1 per cent look set to continue in the coming months. While demand still exceeds supply in most markets and household budgets remain in good shape, Bell said this will not bring buyers back until households are confident their borrowing capacity and mortgage repayments will not rise further.

What the November RBA Meeting Could Mean

‍With the next RBA meeting falling on Melbourne Cup Day, 3 November, Bell described it as a very live meeting, with many forecasters expecting another hike. He said the outcome will depend heavily on upcoming inflation and labour market data, and that a rise in unemployment towards 5 per cent would probably be enough for the RBA to hold until 2027.

Read the full article: Elite Agent

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