Why the RBA won’t be coming to save the property market

September 7, 2026 — 5:20am

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Few people can move asset prices with their words quite like those “high priests” of finance who have been granted the power to set interest rates, the central bankers.

A cryptic remark from a central banker can easily cause sharemarkets to bounce around, especially when the words come from the chair of the US Federal Reserve.

But this is not just something that happens in high finance. Closer to home, central bankers can have a big influence over the biggest asset class in Australia: housing.

Indeed, right now, what happens to the nation’s housing market will be heavily influenced by what happens to interest rates.

If borrowing money becomes cheaper thanks to a rate cut (which is not expected until next year), that could be what eventually stops house prices from falling, for example. Or, more rate rises would surely inflict more property pain. The prospect of rate rises was one reason the Commonwealth Bank last week downgraded its forecast on property prices, tipping peak-to-trough falls of up to 13 per cent.

Do our pollies really want a more ‘affordable’ housing market? We’re about to find out

Ross GittinsEconomics Editor

As Capital Economics put it last week, the outlook for Australia’s housing market “hinges on the RBA.” This makes sense, given interest rates affect how much you can borrow (which is crucial for most home buyers), and the cost of paying the money back.

So, given the RBA’s actions........

© The Sydney Morning Herald