Annual inflation rose to 4.3% in September, up from 4.0% in August, according to figures the Australian Bureau of Statistics released this morning. Prices rose 0.8% in the month and 1.3% over the September quarter. Underlying inflation, measured by the trimmed mean, reached 3.6%.

Housing was the largest contributor, up 5.2% over the year, with the cost of new dwellings up 4.7%. Transport was next, up 8.7%, driven by a 9.4% rise in fuel prices.

What it means for interest rates

The Reserve Bank board meets on Monday and announces its decision on Tuesday 3 November. Deputy Governor Andrew Hauser said last week that the inflation outlook looked “materially worse” than forecast. CommBank now expects a 0.25 percentage point rise to 4.85%, which would be the fifth increase this year, followed by a pause through December and February.

For property, how long rates stay high matters more than one more rise. CommBank has pencilled in cuts for August and November 2027 at the earliest, and stresses that the timing is uncertain. Plan on higher-for-longer.

What higher-for-longer means by asset type

• Industrial. Demand has held up better than in most sectors. Melbourne’s industrial vacancy was 4.9% in the June quarter, and well-located warehouses still draw owner-occupiers and private capital. Dearer debt mainly squeezes buyers who rely on borrowing.
• Office and retail. Buyers will look harder at lease quality. Long leases to strong tenants with recoverable outgoings will hold value better than short or uncertain income.
• Development sites. Rising construction costs and dearer finance squeeze feasibility. Expect developers to push for longer settlements, options and joint ventures instead of straight purchases.
• Childcare and medical. Long leases to established operators with CPI-linked rent reviews remain attractive to investors who want income that keeps pace with inflation.

For owners thinking about selling

A rate rise is not a reason to wait. It changes who the buyer is. In a higher-rate market the strongest bidders are often owner-occupiers, family offices and private investors with little or no debt. Reaching them directly, rather than relying on a broad campaign, can protect the price. If your leases have CPI-linked reviews, make them a headline: with inflation above 4%, indexed income is a selling point.

For buyers

Less competition from highly geared buyers can open doors. Negotiate on terms as well as price, including settlement timing, conditions and lease-backs, and test your numbers at today’s rates plus a buffer.

For developers and landowners

Feasibility is tighter, but good land is still scarce. Landowners who want to sell may get a better result through a deferred settlement, an option or a joint venture that lets a developer manage finance risk over time.

This note is general commentary, not financial or tax advice. Speak to your accountant or financial adviser about your own situation.

Sources: ABS, CPI rose 4.3% in the year to September 2026; ABC News, 28 October 2026; CommBank, 28 October 2026; JLL, industrial vacancy Q2 2026.