The RBA interest rate decision in November 2025 delivered no surprises, the cash rate remains unchanged at 3.60%. However, inflation’s unexpected persistence is reshaping market expectations for 2026. With price pressures running above forecasts and core inflation still firm, the Reserve Bank’s cautious stance signals that rate cuts may be further away than previously thought.
Key Takeaways for Property Owners & Investors
Inflation Has Picked Up, and It’s a Problem
- Trimmed mean inflation rose to 3.0% YoY in Q3, up from 2.7% in Q2 and above RBA forecasts.
- Headline inflation hit 3.2%, partly due to the end of electricity rebates, but core pressures also ticked up.
- The RBA expects inflation to stay above target into 2026, only easing to 2.6% by 2027.
Implication: The chances of another rate cut in early 2026 have diminished. If inflation stays sticky, the RBA may need to hold longer than markets were pricing.
Property Sector Outlook: Strength Despite Caution
- Housing prices are rising, showing that earlier rate cuts and stable conditions are boosting buyer confidence.
- Dwelling construction costs are climbing again, suggesting some rebound in developer activity, but input costs are back in focus.
- Credit remains accessible for both households and businesses, a key enabler of ongoing market strength.
For existing owners: this is still a growth supportive environment
For investors: rising values + tight rental markets = solid income + capital prospects.
Labour & Supply Still Tight
- Unemployment ticked up to 4.5%, but the RBA says labour markets remain “a little tight.”
- Job vacancies are still high and firms are struggling to hire, especially in skilled sectors like construction and trades.
- Productivity remains weak, pushing up unit labour costs, a longer-term inflation risk
For developers: labour availability and build costs remain key constraints.
For investors: lack of new supply could tighten markets further.
What to Watch
- Next CPI (Q4) will be critical for setting the tone in early 2026.
- Credit conditions, if they tighten, it could cap buyer demand.
- Global headwinds, geopolitical risks could either stall demand or trigger risk-off investor behaviour.
Bottom Line
The latest RBA interest rate decision confirms that the path to monetary easing will be slower and more data dependent. While property markets continue to show resilience, persistent inflation and labour tightness could keep rates higher for longer. For property owners and investors, vigilance around upcoming CPI releases and global shifts will be key to navigating the next phase of Australia’s economic cycle.