Interest Rates Aren’t the Problem – It’s How People Think About Them 

The Market Has Already Adjusted to Higher Rates

Inflation control is never a clean, straight line – it is always a little bumpy. You get a few months that overshoot and a few that undershoot. This latest bump doesn’t change the overall trajectory. 

Based on the data in front of us right now: 

• The RBA looks likely to hold rates steady through the end of this year and well into early 2026 

• There is still a strong chance of at least one rate cut in the first half of next year 

• Well-structured investors are comfortably holding their portfolios and whilst there is increased uncertainty, the overall property investment outlook is sound. 

People Are Adapting Faster Than They Realise

Yes, households are still feeling the pinch, particularly at the supermarket checkout. I speak to people often who are shocked at how little you get for $100 these days. 

But non-discretionary spending has picked up again. Households are adjusting. And even with unemployment likely to tick up to around 4.5%, we’re nowhere near distressed economic territory. 

The truth is, Australians are adjusting faster than the media narrative suggests. 

The Real Risk for Investors Isn’t Rates - It’s Waiting

What concerns me more than inflation bumping around is how quickly people use interest rates as a reason to delay decisions 

I understand the instinct to wait for “the perfect moment”, the interest rate cut, the clearer picture, the “signal” that it’s safe to buy. 

But in markets like this, waiting is usually the most expensive decision. 

Right now we’re seeing: 

• New demand strengthening 

• Supply shrinking 

• Rents rising again 

• Capital growth re-accelerating 

• Affordable market segments growing fastest particularly with the impact of the Fed Government’s 5% deposit scheme rolling through markets. 

Confidence Is What Really Moves People

I’ve been doing this a long time, and here’s one thing I can say with certainty: 

People don’t make decisions based purely on logic.
They make decisions when they feel confident. 

The charts, the forecasts and the economic commentary all matter, but their job is to help people understand why the market is behaving the way it is. Confidence comes from clarity, not perfection. 

And right now, the data is much clearer than the headlines would have you believe. 

Where I See Things Going

Looking ahead, I expect interest rates to remain stable in the near term. The most realistic scenario for 2025 is: 

• No further rate increases 

• A potential cut in the first half of next year 

• Gradually improving consumer confidence 

• Continued tightening in supply and rental markets 

In a market like this, decisive investors are usually the ones who come out ahead. 

My Message to Investors

If you’ve been waiting for a sign, here it is: 

Interest rates are the least of our problems.
The fundamentals are strong.
And the window of opportunity is still open, but it’s not going to stay open forever. 

Confidence to act, not caution to wait, is what will make the biggest difference over the next stage of this cycle.