RBA Rate Hike February 2026 What Property Investors Need to Know Now

On February 3, 2026, the Reserve Bank of Australia increased the cash rate by 25 basis points to 3.85%, marking the first rate hike since November 2023 and reversing the three cuts delivered throughout 2025. This decision reflects persistent inflation pressures, stronger-than-expected consumer demand, and tight labor market conditions—all of which directly impact property investors' borrowing capacity, repayment obligations, and portfolio strategy.

If you're holding investment property or planning your next acquisition, this isn't just another RBA announcement. It's a signal that the low-cost capital environment of 2025 has ended, and investors must recalibrate strategies for a higher-rate environment that could persist well into 2027.

With major lenders passing on the full increase within days and forecasts suggesting further hikes may follow, understanding how this move affects cash flow, serviceability, and market dynamics is critical. In this guide, we'll break down the immediate impacts, what analysts predict next, and how Buyers Agency Australia helps investors stay ahead in shifting conditions.

Why the RBA Raised Rates in February 2026

Inflation Remains Above Target

The RBA's official statement confirmed that inflation picked up materially in the second half of 2025. Headline inflation reached 3.8% in December, while trimmed mean inflation hit 3.4%—both well above the RBA's 2-3% target band.

Unlike temporary spikes seen in previous quarters, this increase reflected deeper capacity pressures. Service sector costs remained elevated, wage growth stayed strong, and demand outpaced supply across multiple sectors including housing.

Private Demand Strengthened Faster Than Expected

Consumer spending and business investment grew more robustly than the RBA anticipated in its November 2025 forecasts. Household spending rebounded, supported by earlier rate cuts, rising employment, and increased credit availability.

The RBA noted that