March 2026
Dear Client,
RBA hands down March rate decision
At its second meeting of the year, the Reserve Bank announced the latest cash rate amid ongoing global tension.
For the second time in 2026, the Reserve Bank of Australia (RBA) decided to hike the cash rate by 0.25 points to 4.10 per cent, costing the average borrower an extra $1,416 per year.
The RBA’s decision comes as little surprise amid ongoing tensions in the Middle East and concern that inflation has been more persistent than expected.
PRD chief economist Dr Diaswati Mardiasmo said the RBA is taking a preventive approach rather than a reactive one, choosing not to wait for the March quarterly inflation reading.
“This is to try and protect the Australian economy from a higher inflation rate, which can happen due to the potential price increase in fuel and other goods and services,” Mardiasmo told REB.
However, she said that raising the cash rate to discourage spending and help control inflation could lead to reduced hours or layoffs, and to higher unemployment.
She added that in the housing market, today’s decision could deter people from buying, pushing agents to be “more clever” with their selling strategies and manage vendors’ expectations further.
Additionally, she said that the rate hike will limit the boost in borrowing capacity from the 2025 cuts, with higher mortgage rates adding to affordability pressures and slowing price growth.
“For both home owners and investors, it will impact monthly mortgage repayment, so revising the bank loan is definitely the advice.“
RBA hands down March rate decision – Real Estate Business
Property price forecasts slashed as borrowers told to brace for wave of rate hikes
Borrowers could face further mortgage pressure as predictions of additional interest rate rises have also prompted economists to downgrade property price growth forecasts for 2026.
New forecasts from SQM Research show a sharp downgrade in projected price growth for 2026.
The research house now expects weighted capital city dwelling prices to rise by between zero and three per cent nationally this year, significantly lower than its previous projection of six to ten per cent growth issued late last year.
The revised outlook assumes the cash rate could climb to around 4.35 per cent by mid-2026, while inflation peaks between 4.4 and five per cent in the June quarter.
Louis Christopher, Managing Director, SQM, said rising energy prices and geopolitical uncertainty have increased the risk that interest rates remain elevated for longer.
Despite the weaker national outlook, housing performance is expected to vary widely between cities.
Resource-driven markets such as Perth and Darwin are forecast to remain relatively resilient, with prices tipped to rise between 10 and 13 per cent in Perth and 12 to 16 per cent in Darwin.
In contrast, the eastern capitals face a more challenging environment.
SQM expects values in Sydney to fall between six and two per cent, while Melbourne could see declines of between four and one per cent.
Canstar’s Data Insights Director, Sally Tindall, on Wednesday (11 March) said borrowers hoping the rate cycle had largely run its course may need to reconsider.
The outlook remains uncertain.
“The split among the big four forecasts highlights just how uncertain the outlook currently is,” Ms Tindall said. “The RBA is walking a tightrope between tackling persistent inflation and avoiding pushing too hard.” For borrowers, the key question is how to prepare if interest rates climb again.
Ms Tindall said households should stress-test their finances against mortgage rates at least half a percentage point higher than their current rate.
“If you haven’t stress-tested your budget against a rate that’s at least half a percentage point higher, tonight is the night to do it.
Her broader message is that borrowers should prepare for the possibility of higher rates, even if the Reserve Bank ultimately decides to pause.
“With so much uncertainty around inflation and global conditions, borrowers should make sure their mortgage is competitive and their finances are ready for whatever comes next.”
Thank you for your ongoing support!
Regards David, Benjamin & the Team at DB Philpott Real Estate
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