This week’s interest rate decision has officially shifted the mood in the Australian property market.

The Reserve Bank of Australia has increased the cash rate by 0.25 percent to 3.85 percent, marking the first rate rise in over two years.
Source: RBA monetary policy decision

For homeowners, buyers and sellers, the question is simple.

What happens next?

While the headlines can feel concerning, the real impact depends on your situation, your suburb, and your strategy moving forward.

This article breaks down what this week’s rate rise means, what to expect next, and what smart homeowners should be doing right now.

What happened this week

The RBA raised the cash rate target by 25 basis points to 3.85 percent.
Source: RBA cash rate target overview

The decision is linked to inflation pressures and the RBA’s ongoing goal of returning inflation to target levels.
Source: RBA statement and reasoning

Why interest rates matter for property prices

Interest rates influence the property market mainly because they impact borrowing power and monthly repayments.

When rates rise, many buyers can borrow less than they could previously. That often reduces competition, particularly at higher price points.

For sellers, it can mean buyers become more cautious and negotiate harder, especially if they feel uncertainty about the market direction.

For existing homeowners, it can increase holding costs and prompt decisions around refinancing, restructuring debt, or reviewing plans to sell.

Get a free property value estimate

Find out how much your property could be worth in today’s market with a free property report.

Get your free property report

What this means for sellers right now

If you are thinking of selling in 2026, this week’s rate rise does not mean you cannot achieve a strong result.

But it does mean strategy matters more than ever.

Buyers will be more selective

In rising rate conditions, buyers tend to be cautious and value focused. They still buy, but they take longer to commit and expect the home to feel worth the price.

Homes that attract the strongest competition usually have

• Strong presentation
• Clear value for money
• Accurate pricing from the beginning
• A well executed marketing campaign

Overpricing is riskier after a rate rise

In a softer buyer environment, overpriced properties often sit longer. When a home loses early momentum, it can lead to lower offers later in the campaign.

A smart pricing strategy is designed to attract strong interest early, which still remains one of the best ways to maximise the final result.

Agent quality makes a bigger difference

When buyers hesitate, the agent representing your home becomes even more important.

A strong agent can:

• Position your home correctly
• Attract the right buyer pool
• Create urgency in the campaign
• Negotiate confidently under pressure

Two agents can sell the same property for very different outcomes.

What this means for buyers right now

For buyers, this week’s rate rise may feel like a setback.

But it can also create opportunity, depending on the suburb and price bracket.

Buyers may benefit from

• Less competition in some segments
• More time to compare options
• Greater negotiating confidence
• Improved buying opportunities where listings sit longer

That said, it is important for buyers to re-check their budget and finance settings, as repayments may change and borrowing limits can be affected.

Even small rate rises can influence pre approvals, so clarity is key before making offers.

What this means for homeowners who are not selling yet

If you own a property and are not selling right now, the most important step is not panic.

It is planning.

In a rising rate environment, homeowners typically benefit from

• Reviewing household cash flow and costs
• Checking interest rates and repayment options
• Understanding current equity and home value
• Having a clear plan if selling becomes a future option

Even if you are not selling soon, knowing your current position gives you better decision making power.

What to expect next in 2026

The RBA has made it clear that future decisions will depend on economic data, including inflation trends and employment conditions.
Source: RBA monetary policy decision

This means homeowners should expect the market to remain sensitive to interest rate direction and broader confidence levels.

In many suburbs, buyer demand will remain solid due to limited housing supply, but price growth may become more uneven and more localised than before.

How AgentChoice helps homeowners navigate rate changes

At AgentChoice, we connect homeowners with the top three performing agents in their local area, so you can compare experience, strategy and local results before making a decision.

In changing conditions, the best agents stand out because they know how to

• Price correctly from day one
• Build buyer urgency and competition
• Market strategically to the right buyer pool
• Negotiate confidently when buyers push harder

Instead of choosing an agent based on ads or guesswork, you can compare real strategies and performance in one place.

The bottom line

An interest rate hike does not stop the property market.

But it does change the conditions.

For sellers, success becomes more about strategy, pricing, and agent quality.
For buyers, opportunities can improve if competition eases.
For homeowners, understanding your position becomes more important than ever.

If you want clarity in a changing market, start with local insights and the right support.

Thinking of selling in 2026?

Before making any big decisions, it is worth understanding how top local agents would approach your sale in current conditions.