Login
Rate freeze brings investment opportunity in the summer market
With the RBA keeping the cash rate steady, the property market is expected to remain resilient into 2026, as strong demand, tight supply, and rising first home buyer activity drive a busy summer season.
The Reserve Bank of Australia (RBA) held the cash rate at 3.6 per cent, as expected, with economists and major banks forecasting the next cut in 2026.
The decision followed higher than expected Consumer Price Index (CPI) results, which rose to 3.2 per cent in the September quarter, while underlying annual inflation accelerated to 3.0 per cent, reaching the top of the RBA’s 2-3 per cent target band.
PRD chief economist Dr Diaswati Mardiasmo told SPI that the RBA's decision to hold the cash rate steady was not a surprise and would be beneficial in stabilising market demand.
“Having a steady cash rate will stabilise demand for the property market, as buyers do not feel the immediate need to purchase or try and benefit from a lower interest rate, if it were cut,” Mardiasmo told SPI.
“This can slow down the property price growth that we are currently seeing/have seen due to the previous three cash rate cuts, as well as slowing down transaction times.”
“Buyers might also be taking their time a little bit to make sure that they are getting the best deal possible,” Mardiasmo said.
Similarly, Cotality's head of research, Eliza Owen, said that the RBA’s rate pause could briefly cool property momentum by capping borrowing power and easing buyer sentiment.
“While a pause in interest rates could help to slow price growth, other factors are likely to keep housing values rising leading into 2026.”
Owen said that despite a potential slowdown, strong demand from first home buyers, low arrears, and a tight supply are expected to keep housing prices rising and the market resilient into 2026.
According to Finder’s data, Australia’s property market is forecasted to keep climbing over the next 12 months, with national home prices expected to rise by an average of 5.1 per cent.
Melbourne has been predicted to lead the gains with a 5.8 per cent increase, closely followed by Sydney at 5.6 per cent.
Brisbane, Perth, and Adelaide are also expected to experience steady growth, with forecasted rises of 4.8 per cent, 4 per cent and 3.9 per cent, respectively.
Mardiasmo said that while having a steady cash rate would see some buyers taking their time, a cash hike in early 2026 is not off the table.
“With the inflation rate outside of the 2-3 per cent, it also increases the chances of a cash rate hike in early 2026, depending on the December quarter 2025 figures that will come out at the end of January 2026.”
“So we might see an uptick in sales activity in December before the school holiday starts,” Mardiasmo said.
LJ Hooker’s Mathew Tiller said the stability brought by the steady cash rate will keep the summer market busy as buyer and seller alike will want to make their move before the holidays.
He said the RBA’s decision won’t dent buyer confidence, as below-average new listings have been keeping demand strong and competition high through late spring and into summer.
According to Tiller, the low housing stock across most capital cities has kept pressure on prices, with agents seeing a strong turnout of buyers at inspections and auction clearance rates hovering near 70 per cent, clear signs that demand remains robust.
“Stable rates are a good thing as they provide buyers with some certainty to plan, and this keeps enquiry levels strong. It can be tempting to time selling your property with a rate cut; however, there are plenty of reasons to go to market now.
“Prices continue to edge higher, increasing month on month. Buyers are motivated as we head into summer, particularly families looking to lock in a new home before the start of the new school year. Investor activity is also busy as yields stay firm and vacancy remains tight.”
While spring has typically been peak selling season, Tiller said that buyer interest is expected to carry into early summer, with many prospective owners using the Christmas break to review options, explore online listings, and attend property inspections.
“Listing over summer or even launching a pre-market campaign allows vendors to position themselves ahead of the competition and beat an influx of listings that typically arrives in late February or March,” he said.
According to Finder’s Consumer Sentiment Tracker, nearly 38 per cent of Australians now believe it’s a good time to buy property, up from 28 per cent at the same time last year,
Finder’s head of consumer research, Graham Cooke, said that market confidence has been gradually returning, with buyers cautiously exploring opportunities while keeping higher interest rates in mind.
“There’s a sense that some buyers are seeing opportunities, especially if they've been saving or waiting for the right moment,” Cooke said.
“Higher interest rates are still on everyone’s mind, so it’s more about taking careful steps than diving in headfirst.”
On the commercial side, Knight Frank chief economist Ben Burston told SPI that, despite the RBA holding the cash rate, the market will retain solid growth momentum heading into 2026.
Burston said that strong growth in retail and industrial sectors has been boosting investor confidence and drawing a broader pool of investors back into the market, reflected in Q3’s transactional activity reaching its highest levels since 2022.
“Living sectors are also in vogue, and investors are eager to position themselves for further rental growth over the medium term by scaling up their exposure,” he told SPI.
Additionally, Burston said that office markets have been showing signs of recovery, with Q3 seeing the first yield tightening in Sydney CBD since 2021.
As 2026 unfolds, he said that limited new supply will be expected to drive stronger prime rental growth, supporting the broader market rebound across other cities.
“At the same time, the decision to hold is a reminder that the market cannot rely on multiple further rate cuts to drive growth, and that income growth will need to drive returns over the next cycle,” Burston concluded.
