What it means for Brisbane homeowners and mortgage repayments

Tuesday’s interest rate hike will add about $100 a month to repayments on a $600,000 mortgage, but some experts say the rise is unlikely to have a significant impact on Brisbane’s housing market.

After the Reserve Bank’s first meeting of the year, governor Michele Bullock announced the cash rate would rise from 3.65 per cent to 3.85 per cent.

“I know this [rate hike] is not the news that Australians with mortgages want to hear, but it is the right thing for the economy,” she said.

“We’re trying to target inflation over the next one to two years given the time it takes interest rates changes to flow through the economy.”

While a rate rise of any size is unfavourable for prospective borrowers, experts say it is unlikely to significantly impact Brisbane’s property market.

“There’s a sense that the Brisbane market has been so rock solid lately with lots of momentum, that it might keep going through this,” AMP chief economist Shane Oliver said.

“My only concern would be that the RBA is actually flagging several more hikes to come.”

He said property prices in Brisbane were not as vulnerable to a single rate hike as in other cities, as the Queensland capital had “stronger economic fundamentals”.

“The real issue will come if there’s more hikes and people start worrying about that,” he added.

Brisbane couple Renee and Jay Hams bought their home in Nundah for $400,000 in 2013.

About three years ago, they took out a construction loan, doubling their mortgage. It was a jump, but one they felt prepared for having managed their mortgage conservatively from the outset.

“It’s good to go, ‘OK, this is what the interest rates are now, and this is what we’ll be paying’,” Renee said.

“But if there are four or five increases, you also want to know what your repayments will be if that happens. And if you can still afford it, then you’re OK.”

The couple faced that test earlier than anticipated, after 12 interest rate rises in the 12 months it took for their home to be built.

“We’ve always been variable, so we can fluctuate when it goes up and down,” Renee said.

“When it was at its highest … we didn’t change the repayments. We’ve kept them the same.”

This approach is likely why the Hams were indifferent about the prospect of a rate hike this week.

“We’ve just budgeted so it absorbs [any changes]. We’ve always been like that … so the interest rate today probably won’t affect us,” Renee said.

Loan Market mortgage broker Patrick Moore believes the rate hike will be largely inconsequential for most homeowners in Brisbane.

“I don’t think one rate hike is going to dramatically shift or change … how much a house costs or the amount of buyers that are rocking up every Saturday to try and find their dream home,” he said.

“The south-east Queensland market is super hot right now. I think we’ll still see large amounts of people coming to open homes, particularly in the $1 million price range.”

However, he concedes the rate rise may cause some mortgage holders to reevaluate their finances.

“When you start paying more, I think it does cause existing people to have a look around and go, ‘is this still right for me from a financial standpoint?’”

Husband and wife James Condon and Melissa Lau, clients of Moore’s, recently bought an investment property in Brisbane, which they eventually plan to move into.

Despite hoping interest rates would fall in the new year, the couple were realistic about the prospect of a rise and, like the Hams, planned for multiple increases.

“At the time [of buying the house] I wasn’t necessarily thinking [that interest rates] were going up. I was hoping they might go down at some point during 2026,” Condon said.

“The good thing for Brisbane at the moment is … the capital growth is absolutely there.

“If you can budget for it, if you can ride it out, then the growth is there for you to take advantage of, particularly when you consider the infrastructure.”

Brisbane’s median house price reached $1.17 million in the last quarter, climbing $50,000 in three months.

Prices are predicted to soar nearly 11 per cent this year, double that of Sydney, with the growth following a 14.6 per cent jump in Brisbane’s median house price in 2025. The growth is tipped to continue even with the RBA rate rise.

“More and more people are making the move to Brisbane, but as with most other cities, housing supply has not kept pace, amplifying cost pressures,” KPMG chief economist Dr Brendan Rynne said.

“As a result, Brisbane’s growth is expected to continue for the foreseeable future.”

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