Rates up, prices down: what October's news means for your money

John Bartle

3 hours ago

5 min read

Person checking their finances with a calculator and notebook

In this month's update, John Bartle, Director and Senior Financial Adviser at Aspire2 Wealth, looks at what the latest news means for your money and the checks worth making before the end of the year.

Rates went up again this week. Inflation is trending upwards. And Christmas is less than three months off.

That makes October the right time for a financial checkpoint: a quick look at your home loan, your super and your spending before the silly season takes over.

Rates rise for the fourth time this year

On Tuesday 29 September, the Reserve Bank of Australia (RBA) lifted the cash rate by 0.25 percentage points to 4.60%. It's the fourth rise of 2026, after February, March and May, and it takes the cash rate to its highest level since late 2011.

The Board's vote was unanimous. It also made clear it will raise rates again if it needs to. The next decision is due on 3 November.

The next morning, the Australian Bureau of Statistics (ABS) showed why. Prices rose 4.0% in the year to August, up from 3.5% in the year to July. Housing costs led the way, up 5.7%.

What it means for your home loan

If your lender passes on the full rise, a $731,000 home loan (the ABS average for a new owner-occupier loan) will cost about $118 more a month. Add the three earlier rises and rates have climbed a full percentage point since January. The Australian Council of Trade Unions (ACTU) estimates the average mortgage holder now needs to find an extra $460 a month.

If you haven't had a home loan review this year, now is the time. Lenders often save their sharpest rates for new customers, so the rate you signed up for may no longer be competitive. Our mortgage broking team can compare your loan against what's on offer and tell you whether switching is worth it.

What's happening in the property market

Higher rates are now showing up in house prices. Cotality's Home Value Index fell 1.1% nationally in September, the sixth monthly fall in a row. National values now sit 5.2% below their March peak and are flat on a year ago. The downturn is broad: 97% of capital city suburbs lost value over the three months to September.

Every capital except Darwin fell in September. Brisbane had the sharpest drop at 1.5%, followed by Sydney at 1.4% and Melbourne at 0.7%. Sydney has fallen furthest overall, with values 8.6% below their February peak.

Perth held up longer than most but is now following the national trend. Values here fell more than 1% in September, after a 0.9% fall in August had already left them 3.2% below their April peak. That's a correction after a big run: Perth, Brisbane and Adelaide gained between 50% and 70% over the past five years.

Renters haven't seen the same relief. The Real Estate Institute of Western Australia (REIWA) puts Perth's vacancy rate at 1.9% in August, still below the 2.5% to 3.5% range it considers balanced.

What that means for you depends on where you sit:

Buyers: More listings and softer prices give you room to negotiate, but higher rates also cut how much you can borrow.
Owners: A lower valuation can shrink your equity, which matters if you plan to refinance. Know where you stand before you review your loan.
Investors: Tight rental supply supports your income, but run your numbers again at today's rates.

How much super do I need?

Higher prices don't only hit your mortgage. They lift the cost of retirement too.

The Association of Superannuation Funds of Australia (ASFA) Retirement Standard for the June quarter 2026 puts a comfortable retirement for homeowners aged 65 to 84 at:

Couples: $78,998 a year
Singles: $56,166 a year

To fund that lifestyle from age 67, ASFA estimates you'll need about $730,000 in super as a couple, or $630,000 as a single, with a part Age Pension on top.

Most Australians aren't there yet. Australian Prudential Regulation Authority (APRA) figures show the average super balance for people aged 60 to 64 is about $270,800.

Good retirement planning closes that gap early. Extra contributions, the right investment mix and a fund that isn't eating your returns in fees all add up over time. The sooner you check, the more time your money has to work.

For a closer look at the numbers, read Damon Tuthill's article How much do I need to retire in Australia?

Tune out the market noise

The RBA isn't alone. The Federal Reserve in the United States (US) and the European Central Bank (ECB) both raised rates in September, and markets have been jumpy in response.

Market volatility makes headlines. It rarely makes a good reason to change a long-term plan. If your investments match your goals and your timeframe, a rough month is part of the ride. If you're not sure they do, that's worth a conversation.

Build your pre-holiday budget now

School fees, Christmas gifts, summer holidays and back-to-school costs all land in the same few months. With higher repayments on top, the squeeze is real.

A pre-holiday budget set in October gives you room to plan. Decide what you'll spend, put it aside each pay, and you'll start 2027 without a credit card hangover.

Your October checklist

Home loan: Compare your rate with what's on offer today.
Super: Check your balance against the ASFA benchmarks and look at topping it up.
Spending: Set your holiday budget before the shops fill up.
Insurance: Make sure your life and income protection cover still fits your life.
Estate planning: Check your will is current, especially if your family or finances have changed.

Talk to a Perth financial adviser

Aspire2 Wealth helps Perth families plan for every stage of life, from buying a home to retiring well. If this month's news has you wondering where you stand, give us a call.

Sources

Aspire2 Wealth Advisers Pty Ltd ABN 42 125 897 903 is an authorised representative and credit representative of Charter Financial Planning Limited ABN 35 002 976 294, AFSL and Australian Credit Licence No. 234665. This website contains information that is general in nature. It does not take into account the objectives, financial situation, or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.