What Happened?

Rates increased 0.25%

In February 2026, the RBA increased the cash rate from 3.60% to 3.85%, marking a renewed tightening move after a period of stability.

See media release here: View full statement.

Why Did the RBA Increase Rates?

The decision reflects:

  • Inflation proving more persistent than expected
  • Continued strength in employment and wage growth
  • The need to ensure inflation returns sustainably to the 2–3% target range

The RBA signalled that while progress is being made, it is not yet confident inflation is under control.

What This Means for Property Investors

A rate rise introduces:

  • Slightly higher borrowing costs
  • Increased focus on cash flow and serviceability
  • Continued pressure on highly leveraged buyers

However, it also reinforces a key dynamic:

  • Many buyers remain on the sidelines, reducing competition

Strategic Opportunity

Periods following rate increases often create:

  • Less competitive buying conditions
  • More negotiating power
  • Opportunities to secure quality assets below peak pricing

For Defence investors, this aligns with a disciplined, long-term acquisition strategy.

Outlook

The February increase suggests the RBA is willing to act further if needed, but we are likely nearing the final stages of the tightening cycle.