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The Reserve Bank lifted interest rates again on 17 March by 0.25 percentage points, but what does that actually mean for you if you’re looking to buy or sell? Here’s three things you need to know about the latest RBA decision and how it impacts you.

1. Rates are up because everyday costs are rising again

The main reason for the interest rate increase is simple: things like petrol are getting more expensive, and there’s a risk those price rises may start to affect other areas.

The RBA is trying to get ahead of that before it sticks.

What it means for you:

  • Buyers: Your borrowing power may shrink slightly, so your budget could tighten. If you’re entering the market now, it’s worth double-checking what you can comfortably afford

  • Sellers: Buyer activity may cool due to tighter rates, but low listings and strong demand can still support competitive pricing

2. The economy is holding up (for now)

Despite global uncertainty, Australia’s economy is still relatively strong. People are working, incomes are steady, and spending hasn’t dropped off dramatically.

That’s given the RBA confidence to push rates higher.

What it means for you:

  • Buyers: You’re not entering a weak or falling market. Competition may ease slightly, but you’re still buying in a relatively stable environment

  • Sellers: This is why prices haven’t dropped significantly. Demand is still there, particularly in well-located areas

3. Property prices aren’t expected to fall - just grow more slowly

Higher rates will take some heat out of the market, mainly by reducing how much people can borrow. But there’s still a shortage of housing, which is keeping upward pressure on house prices and rent.

What it means for you:

  • Buyers: You might get a bit more breathing room compared to last year, but waiting for major price drops could be unrealistic

  • Sellers: The market is shifting from rapid growth to more measured conditions - understanding the market and your property value is more important than ever

What happens next?

The RBA acted to contain rising inflation expectations, so going forward we can expect them to continue to monitor inflation and the economy closely. More rate adjustments could follow if inflation pressures continue.

The next interest rates announcement will be on 5 May.

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