Will the RBA's Next Move Change Yours?

The Reserve Bank has signalled it may need to lift interest rates again, with markets pricing in a better than 80% chance of a rise at the September board meeting. If you are planning to buy or sell in the next few months, it is worth understanding what is driving that and how it could affect your move.

What the RBA is saying

Speaking at a parliamentary hearing, RBA Governor Michele Bullock said that while earlier rate rises were designed to bring inflation back to the target band by late 2027, recent data suggests the risk of inflation running higher is now playing out.

She also made clear that bringing inflation down is likely to need a period of slower growth in the economy, especially with productivity still sluggish. Easing property values may help cool demand, but house prices remain roughly 50% higher than before 2020.

What is pushing inflation up

The RBA has pointed to several pressures working at once:

• Oil and energy costs: conflict in the Middle East has pushed Brent crude above $104 a barrel, lifting energy and transport costs.
• Businesses passing on costs: ongoing supply disruptions mean more businesses are passing higher costs on to customers.
• Stronger global demand: investment in artificial intelligence is driving faster than expected growth in the US and the Asia-Pacific, which is supporting demand here too.

Deputy Governor Andrew Hauser noted that demand linked to the tech sector keeps surprising on the upside, which is offsetting some of the drag from higher borrowing costs.

Info: When markets expect a rate rise, lenders often start adjusting their rates and borrowing limits before the RBA formally announces anything.

What a rate rise could mean if you are buying

A higher cash rate usually means higher repayments, and it can reduce how much a lender is prepared to let you borrow. If you are planning to buy, I recommend checking your pre-approval with your lender or broker before you start making offers, so you are not caught short at the last minute.

The gap between exchange and settlement matters too. If rates move during that time, your repayments may change before you have even collected the keys.

Tip: Before you sign, ask us about the finance arrangements in your contract. We will explain whether the contract is subject to finance and what happens if your loan is not approved in time.

What it could mean if you are selling

Buyers may need longer to secure finance when lending conditions tighten. Allowing a realistic settlement period can help avoid delays and keep your sale moving.

If you are selling one property and buying another, timing becomes even more important. We can manage both matters for you and work with your bank and the other parties, so you always know where each settlement stands.

Note: We are not financial advisers. For advice on borrowing, repayments or the right time to buy, please speak with your lender, mortgage broker or financial adviser.

Frequently asked questions

How do interest rate rises affect property buyers?

They generally increase loan repayments and can reduce your borrowing capacity. Your lender or broker can tell you exactly how a change would affect your own loan.

What happens if my finance is not approved after exchange?

If your contract is unconditional, you may still have to complete the purchase and could risk losing your deposit. That is why it is so important to have your finance confirmed and your contract reviewed before you exchange.

Should I wait for rates to change before buying?

That depends on your circumstances and is best discussed with a financial adviser or broker. Whenever you decide to buy, we can review the contract quickly so you are ready to act.

Can you help if I am buying and selling at the same time?

Yes. We manage both matters and coordinate with your bank and the other parties, so the timing of each settlement is clear from the start.