Yesterday, the Reserve Bank of Australia lifted the official cash rate by 0.25% to 4.10% — the second rise in as many months. If you’re in property, or hoping to be, this matters. Let me break it down simply.
Why does the RBA even adjust interest rates?
Think of the economy like a car. When it’s going too fast like prices rising, people spending beyond their means, the RBA taps the brakes. It does this by raising the cash rate, which is essentially the interest rate banks charge each other to borrow money overnight.
When that rate goes up, borrowing becomes more expensive for everyone. People spend less. Businesses invest less. Things slow down. And ideally, inflation which is the price of everything combined starts to come back under control.
The RBA’s job is to keep inflation low and stable, averaging between 2–3%, while keeping employment as high as possible. Reserve Bank of Australia Right now, domestic price pressures, including a tight labour market and strong economic growth, were already pushing inflation too high , throw in the war in the Middle East, which shut down oil passage through the Strait of Hormuz, has complicated the picture further. CommBank
The RBA board noted in its statement that inflationary pressures picked up materially in the second half of 2025. CommBank So they acted, and it was close. The decision was split five to four. CommBank
What does this mean for lending?
In short: borrowing just got more expensive, again.
The 0.25% hike is expected to push the average rate for a new owner-occupier home loan to around 6.00% per annum. Savings.com.au
Every 0.25% increase adds approximately $161 per month to repayments on a $1 million mortgage, and can reduce borrowing capacity by around $30,000 to $40,000. Hall & Wilcox That’s significant for households already being squeezed by the cost of living crisis that we can’t seem to shake post covid, and we’ve now seen two rises this quarter alone.
If ANZ and NAB are right and there’s another hike in May, that would effectively wipe out the three interest rate cuts handed down in 2025. Savings.com.au All four major banks have already announced they’re passing this one on in full, with variable rate increases flowing through from late March.
For buyers, this means your borrowing power is shrinking. For sellers and agents, it means the buyer pool is tightening, and pre-approval figures from even three months ago may no longer be accurate.
So what happens to the Queensland property market?
Queensland is not a typical market.
The Queensland property market in early 2026 continues to make headlines as one of the most competitive and growth-oriented real estate environments in Australia, fuelled by strong demand, limited supply, interstate migration and major infrastructure projects. TheOnsiteManager
Brisbane house prices increased about 1.1% in February alone, taking the median house price to approximately $1.18 million, with annual growth sitting at around 17.6%. Brisbane unit prices increased 3.7% in February, with annual growth approaching 28%. Martinuzzi
Rate rises will take some heat out of demand, that’s actually the point. But they’re unlikely to crash a market propped up by structural factors that don’t disappear overnight: population growth, a housing supply crisis, the 2032 Olympics pipeline, and the ongoing migration of buyers priced out of Sydney and Melbourne.
If additional rate rises occur, they may temporarily slow borrowing capacity however historically the property market tends to adjust relatively quickly as buyers adapt. Martinuzzi
Strong internal migration across Queensland, relatively better affordability compared with Sydney, and a persistent shortfall in housing supply have combined to support stronger price growth and those factors remain largely intact. Money magazine
What we’re likely to see is a more fragmented market. Those at the lower end of the price range, the first home buyers and those relying heavily on borrowing capacity will feel the squeeze the most. Cashed-up buyers, downsizers, and investors with equity? Less so. We will hear more about FHB being locked out of the market even further.
The Queensland market isn’t going to fall off a cliff. But it is becoming a more sophisticated game.
What questions are you getting from buyers and sellers this week?