RBA lifts rates: forcing investors to act now

After months of speculation, the Reserve Bank of Australia has moved again, lifting the cash rate to 3.85%. We know your clients will be asking the same question:

“What does this actually mean for me – and is now the time to move?”

Our message to investors is simple: the period around a key RBA decision is when positioning matters most. On the surface, another rate rise sounds like more pressure for borrowers. But for investors who think in cycles rather than headlines, today’s decision could actually open the door to opportunity – particularly in Victoria.

Investor takeaways

RBA Hike to 3.85%: Persistent inflation has ruled out any rate cuts for the first half of 2026, providing a clear “stable-high” outlook for investors.
Reduced Competition: Higher rates act as a filter, removing emotional retail buyers and creating a strategic window to negotiate on prime assets.
Market Resilience: Despite the hike, Cotality data shows a 0.2% national rise in January, underpinned by a low 4.1% unemployment rate.
The Victorian Edge: Victoria remains the ultimate value play, with Melbourne’s mid-$800k median offering a massive entry-point advantage over Sydney’s $1.3M.
Supply Scarcity: Chronic stock shortages and high migration mean property prices are primed to keep climbing—regardless of the RBA’s move.

Why the RBA moved

Today’s increase is all about inflation. Despite progress over the first half of 2025, inflation has proven sticky, sitting above the RBA’s 2–3% target band in the second half of the last year. Major forecasters still don’t expect a meaningful rate‑cutting cycle in the first half of 2026.

Why a rate rise can be good news for investors

For many buyers, another rate increase is the cue to step back and “wait and see”. That instinct is understandable – but it can also create a short window where conditions favour investors who stay active.

A rate rise tends to:

Reduce competition from more marginal buyers and some owner‑occupiers who are highly sensitive to repayments.
Shift the focus from “fear of missing out” to careful, fundamentals‑based decisions.
Keep parts of the retail market on hold, even while underlying demand for well‑located, investment‑grade property continues.

In that environment, investors who are well‑prepared can secure quality assets without bidding against as many emotionally‑driven purchasers.

What January’s data is telling us

January 2026 data shows that, even with another potential RBA move on the horizon, prices have continued to edge higher:

National dwelling values rose modestly (around 0.2% month‑on‑month), according to recent January indices.
Sydney and Melbourne were softer, with flat to slightly negative moves in January as more listings came to market – but overall values are still holding up thanks to low unemployment and underlying demand.
According to ABS, unemployment rate fell from 4.3% to 4.1% in December 2025.
Adelaide, Brisbane and Perth recorded the strongest monthly growth as limited stock and strong population growth pushed prices higher.

In other words, the market is not “falling away” in the face of higher rates. Instead, we’re seeing a more orderly, data‑driven upswing driven by supply shortages, migration and incomes.

Victoria: still comparatively affordable, still moving

Within that national picture, Victoria – and especially Melbourne – stands out for investors.

Recent January figures show:

Melbourne’s median dwelling value sitting in the low‑to‑mid $800,000s, well below Sydney’s ~ $1.3 million and under Brisbane and Perth.
In regional Victoria, median house prices are around $640,000, with many well‑located growth corridors still available under $650,000.
Rental demand remains solid, with vacancy rates tight across key suburban and regional markets.

That combination – affordable entry points relative to other major capitals, plus resilient rental demand – is exactly what long‑term investors look for.

For investors with a medium‑to‑long‑term horizon, today’s rate rise is less a reason to retreat and more a reminder to focus on fundamentals: location, employment hubs, population growth, rental demand and quality of stock.

If you’re ready to move beyond the headlines, now is the time to be strategic.