RBA Lifts Cash Rate to 4.60% as Bullock Flags Risk to Home Building

The Reserve Bank of Australia raised the cash rate target by 25 basis points to 4.60 per cent on 29 September. The Monetary Policy Board’s decision was unanimous.

The Board’s statement said inflation remains elevated and that some of the upside risks flagged in August are materialising. It also noted that housing prices have fallen in most capital cities and new housing loans have declined noticeably.

Why it matters

Governor Michele Bullock spoke directly to developer feasibility at her media conference. She said there is a structural undersupply of housing, and that “with the downturn in the housing market, it may make it uneconomic for developers to build”.

She also said the RBA is observing the cost of building materials rising quite substantially, and that this might be a risk to dwelling construction. That is the squeeze Brisbane developers are already modelling: end values softening while construction costs climb and debt costs rise.

For South East Queensland, the timing lands hard. Cotality’s September index, released two days later, showed Brisbane recording the sharpest monthly fall of any capital, down 1.5 per cent, with sales volumes down 27.2 per cent on a year earlier.

The numbers

• Cash rate target: 4.60 per cent, up 25 basis points.
• Vote: unanimous.
• Labour market: the Board said conditions have eased broadly as expected and leading indicators are broadly stable.
• Next meeting: 2-3 November 2026.

Cotality described the new rate as the highest cash rate in fifteen years.

What’s next

For projects relying on presales, higher rates cut buyers’ borrowing capacity and lift the cost of holding land and construction debt. Lenders’ revised serviceability buffers and presale requirements over the coming weeks will show how much feasibility headroom remains. The 2-3 November meeting is the next decision point. See our Brisbane home values report and national coverage.