06/05/2026
Well, it's official. The RBA has done it again — another 25 basis points, taking the cash rate to 4.35%. Not exactly the news we were hoping for with our afternoon coffee, but here's the full picture and what it actually means for you.
📊 THE RBA DECISION (THE SHORT VERSION)
The Reserve Bank raised rates 5th May for the third time in 2026, pushing the cash rate from 4.10% to 4.35% — the highest it's been since 2011. The culprit? Inflation, which climbed to 4.6% in March, driven largely by global energy costs. The RBA wants to cool things down, and higher rates are their tool of choice.
For those keeping score at home, this wipes out all three rate cuts from 2025. Remember those? Feels like a lifetime ago.
What it means for your back pocket:
• $600,000 loan — about $91 more per month
• $750,000 loan — about $113 more per month
• $1,000,000 loan — about $150 more per month
Your lender will usually pass this on within 10–14 days, so keep an eye on your next statement.
Are more hikes coming? Possibly. The next RBA meetings are 15–16 June and 10–11 August, and Westpac is tipping at least two more rises this year, but they are the most bullish. The other big banks are not tipping any more hikes this year (yet). We'll keep you posted as things develop.
🏠 BUDGET WATCH — NEGATIVE GEARING & CGT
As if one big financial headline wasn't enough, the Federal Budget lands in just one week on 12 May. And for property investors, it's worth paying attention.
Treasurer Chalmers has flagged that changes to negative gearing and the capital gains tax (CGT) discount are on the table. Nothing is law yet — but here's what's being discussed:
Capital Gains Tax Discount:
Currently, if you sell an asset you've held for 12+ months, you only pay tax on half the gain. The proposals being modelled would reduce that discount — either to 33%, or 25%, or replace it entirely with inflation-based indexation. It’s not clear what they will do for existing owned properties and if they will extend to all asset classes.
Negative Gearing:
The Government is looking at either capping deductions to two investment properties per person or abolishing it altogether with a carve out for newly built properties. Looks like existing properties would be grandfathered.
The reassuring bits:
• Nothing is legislated yet — things may be watered down once they hit parliament
• Your family home is safe — no changes proposed there
• Existing holdings are widely expected to be grandfathered
✅ SO, WHAT SHOULD YOU DO?
First take a breath. Then as always, if you want to talk through your own situation just hit reply or give us a call. No question is too small — this stuff is genuinely complicated and you're not alone in finding it a lot to digest.
