REIQ: Households will hurt from highest interest rate in 15 years

The Real Estate Institute of Queensland (REIQ) says the Reserve Bank of Australia's (RBA) highly anticipated move to increase the cash rate by 25 basis points will further reduce borrowing power, increase mortgage costs and risk slowing investment in supply. 

REIQ CEO Antonia Mercorella said today’s decision marks the fourth rate hike this year and takes the cash rate to 4.60 per cent, its highest level in fifteen years (since October 2011 when it was 4.75 per cent), pushing borrowing costs beyond the previous post-pandemic peak. 

Impact on borrowers and borrowing power in Queensland 

For a borrower with Queensland’s average new owner-occupier loan of around $750,000, today’s increase could add approximately $116 to monthly mortgage repayments. When combined with the February, March, and May rate rises, this represents an additional mortgage burden of around $458 per month, or $5,496 per year.  

Higher interest rates also directly affect borrowing power. As a result of this hike, a single buyer earning Queensland’s average full-time income of $106,100 could see their borrowing capacity reduced by around $12,000, while a dual-income household with children may experience a reduction of around $17,000. Across the four rate increases, borrowing capacity has fallen by an estimated $49,000 for a single-income buyer and $71,000 for a dual-income household. 

More pressure on rental supply 

Ms Mercorella said there was also concern about the impact on housing investment and rental supply against a backdrop of persistently low vacancy rates.  

“It is another blow to property investors, many of whom are still getting their heads around significant changes to federal investor tax settings,” she said. 

“In markets where vacancy rates are already chronically and critically low, any reduction in investor participation risks further tightening rental supply and placing additional pressure on tenants.” 

Housing supply is key 

Ms Mercorella said the greater concern for Queensland and Australia remains the supply side of the housing equation.  

“Interest rates cannot solve a housing shortage. Boosting the delivery of new homes and maintaining investment in housing stock will be critical to improving affordability and easing pressure across both the ownership and rental markets,” Ms Mercorella said. 

“Queensland delivered 33,100 dwellings in the year to March 2026, well short of its annual target of 49,300 homes, highlighting the scale of the state's housing shortfall.  

“However, some positive signs have started to prevail. Queensland’s dwelling approvals pipeline was running at 4,361 dwellings in trend terms in July 2026, above the roughly 4,100 approvals required each month to meet the state's National Housing Accord target.  

“Also, there are now a record 50,000 dwellings under construction across the state. This is a good signal for future easing of supply pressures in Queensland.”