What October’s Inflation Numbers Really Mean for Property in 2026
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If you were hoping for an interest rate cut in early 2026, the latest inflation data may have just changed the story.
October's figures reveal a mixed bag — and for property buyers and investors, that matters. While some media headlines celebrated inflation falling within the Reserve Bank's target range, the deeper numbers tell a more complex (and cautionary) tale.
Let’s break down what actually happened, what it means for interest rates, and how this shapes the property market heading into the new year.
The Headline vs The Reality
The headline inflation rate in October came in at 2.1%, comfortably within the RBA’s official 2–3% target range.
But the Reserve Bank doesn’t base its decisions on headline figures alone. What they care most about is trimmed mean inflation, often called the underlying rate which is a more accurate reflection of persistent price pressure.
And that figure rose from 3.2% in September to 3.5% in October, putting it well above the target band. That jump has significantly lowered the chances of a February rate cut, and may push any movement further into the second half of 2026.
What It Means for Interest Rates
The cash rate currently sits at 3.60%, and with underlying inflation proving sticky, the RBA is unlikely to move any time soon.
This means borrowing costs will remain steady at best — and possibly stay higher for longer than originally anticipated.
Buyers holding out for better lending conditions may end up waiting through most of 2026. And in the meantime, property prices are continuing to rise in many markets, including Perth.
So, Is It Still a Good Time to Buy?
Yes but with a caveat: buyers need to adjust their expectations. The dream of record-low interest rates returning anytime soon is fading.
Instead of waiting for cheaper credit, smart buyers are focusing on:
Getting clear on their borrowing power now
Targeting areas with growth potential and rental strength
Taking advantage of recent price momentum
If you can secure a competitive loan rate today and buy well in a rising market, you’re still in a strong position for the long term.
Why Property Still Outperforms in This Environment
While savings rates remain modest and inflation eats into cash value, property continues to deliver on both capital growth and rental yield.
Rents in Perth remain high
Vacancy rates are low
Stock levels are still tight
This makes real estate one of the few investment classes that continues to offer both income and capital growth potential — even without rate cuts.
Final Word
October’s inflation spike may have dashed hopes of a quick rate drop, but it hasn’t stalled the property market. If anything, it reinforces why real estate continues to outperform other options, particularly when approached with a clear strategy.
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