The Reserve Bank has lifted the cash rate by 0.25 percentage points to 4.60% — its highest level in 15 years. Edgar says the decision risks putting further pressure on buyers, renters, small businesses and the wider economy.
The Reserve Bank’s latest decision takes the cash rate to 4.60%, effective 30 September 2026. The Bank cited elevated inflation and ongoing cost pressures. Read the RBA decision.
For Edgar, the concern is the combined effect on the property market, rental supply and household spending.
“The government is trying to make property more affordable, but at the same time it is pushing investors away,” Edgar says. “If investors do not buy rental properties, rental supply can tighten and rents can rise because more people are competing for fewer homes.”
Edgar says first home buyers are now being asked to enter the market at the highest interest rates in 15 years.
“I do not think many buyers want to jump into the market when repayments are this high,” he says. “People I know are spending their money elsewhere instead of investing or saving for property.”
Less money in the economy
Edgar believes rising mortgage costs will reduce household discretionary spending and affect local businesses.
“When people have to put more money into their mortgages, they have less left for dinners, holidays, travel, coffee and weekend spending,” he says. “If money is not flowing, businesses suffer and employment suffers. This is not a good outcome for anybody.”
He says existing investors may need to pass some higher holding costs on through rent increases, placing more pressure on tenants already facing high rents.
For buyers who can still afford it
“Look for the special deals,” Edgar says. “Builders may start offering upgrades or discounts, so if it is a property and location you genuinely want, it can be an opportunity.”
He says buyers should focus on a price range that remains comfortable, even if rates rise again. “If rates eventually come down, you are already used to paying the higher amount and can keep putting that money into the loan. That can help you pay off the home faster.”
Existing borrowers should reassess borrowing power
“As rates rise, the amount a lender will offer can fall,” Edgar says. “Reassess what you can borrow and search for property based on what is comfortable, whether you are buying to live in or as an investment.”
Edgar expects higher rates may produce sharper buying opportunities. “When rates eventually start coming down, confidence can return very quickly,” he says. “Buyer interest can rise, prices can start moving, and that turn can happen faster than people expect.”
This article contains Edgar’s personal market commentary and general information. It is not financial advice. Buyers and borrowers should consider their circumstances and seek independent advice before making a decision.
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