Property market update – February 2026

It’s been a busy few weeks in the property world.

Most notably, the Reserve Bank of Australia increased the cash rate for the first time since November 2023. Even so, property prices have continued to climb in several markets and housing confidence has held up.

As interest rates and lending conditions shift, having professional guidance can help you navigate your options. Whether you’re purchasing or thinking about refinancing, we can compare lenders and help you understand what’s available.

Interest rate news

At its first meeting for 2026, the RBA hiked the cash rate 0.25 percentage points to 3.85% in response to rising inflation data.

The widely anticipated decision marked the end of the shortest rate-cutting cycle in the RBA’s modern history, after three cash rate reductions in February, May and August of last year.

The Consumer Price Index (CPI) rose 3.8% in the 12 months to December, up from 3.4% in the 12 months to November.

Meanwhile, underlying inflation (as represented by the trimmed mean) was 3.3% in the 12 months to December, slightly up from 3.2% in the 12 months to November.

The RBA wants inflation “sustainably” within its target band of 2 to 3%, preferably around the midpoint.

“The recent run of data gives the board a clear enough view (that) the underlying inflation is too strong,” RBA governor Michele Bullock told reporters after the decision.

“Now, I know this is not the news that Australians with mortgages want to hear, but it is the right thing for the economy.”

After the decision, all of Australia’s big four banks were quick to announce they’d be passing on the cash rate increase.

According to Roy Morgan data, February’s cash rate hike could send 1.3 million households into mortgage stress territory, adding another $115 to the monthly repayment on an average $694,000 mortgage.

If you’re feeling concerned, reach out and we’ll let you know whether your lender is increasing your interest rate, what that means for your repayments and whether you could find a more competitive loan elsewhere.

The RBA board will announce the next cash rate call on 17 March. February’s decision was unanimous, and there’s widespread talk there may be more increases to come.

Home value movements

According to Cotality, national dwelling values rose 0.8% in January, up from a 0.6% increase in December, with all capital cities recording positive growth for the month.

Perth outshone all the other capitals, with prices rising 2%. Brisbane’s monthly gain slowed from 2% in October last year to 1.6% in January, and Adelaide’s monthly increase dropped back to 1.2% from a 1.8% rise in December. Sydney and Melbourne lagged behind.

Cotality research director Tim Lawless noted that housing values are still rising despite affordability constraints and the prospect of further rate hikes, though momentum is expected to slow.

“The ongoing capital gains reflect persistently low inventory in the face of above-average housing demand, however, we are likely to see demand side pressures gradually ease in 2026,” he said.

“Affordability and serviceability constraints are likely to naturally dampen demand, but also renewed cost-of-living pressures and a strong chance that interest rates will rise. There is also slowing population growth to consider.”

Meanwhile, regional markets performed strongly in January, with Cotality’s combined regionals index up 1%.

*Monthly Home Values figures as of 31 January 2026

*Australian auction results, clearance rates and recent sales for the week ending 08 February 2026

*The clearance rate is preliminary and current as of 11:30 pm AEDT, 11 February 2026

Ready to buy?

With interest rates trending higher, it may be a good time to review your home loan and consider your options. Refinancing could help reduce the amount of interest you pay over time, making it worth exploring.

Likewise, if you’re planning to buy, we can compare the market and organise pre-approval on your finance, so that you can dive in confidently with an offer or bid.

It’s also worth noting that from 1 February, the Australian Prudential Regulation Authority (APRA) introduced limits on high debt-to-income lending. Banks are now restricted to issuing no more than 20% of new home loans to borrowers with a debt-to-income ratio of six times or more, with the cap applied separately to owner-occupier and investor loans.

The measure is designed to curb risky lending, so if this applies to you, chat to us about your options.

Additional sources

Cotality Data Daily Home Value Index: Monthly Values
https://www.cotality.com/au/our-data/auction-results
https://www.realestate.com.au/auction-results