Interest rates rise to 4.85%: what it means for renters and room listers
The Reserve Bank raised the cash rate by 0.25 percentage points to 4.85% on Tuesday 3 November 2026. It is the fifth rise this year and, ABC News reports, the highest level in 18 years.
A split decision
Does a rate rise push rents up?
Not directly. Rents are set by what tenants can pay and how many homes are available. But higher rates raise the cost of owning an investment property, and some landlords try to pass that on at renewal. At the same time, tenants are close to their limit, which is holding rent growth back (see rent growth slows as renters hit a ceiling).
What could happen next
The board's next decision is due in December. Whether rates move again will depend mostly on inflation, which was 4.3% in the year to September. A split vote suggests some board members think rates may be high enough already.
For renters, the bigger influences on rent remain supply and demand, and recent data shows rent growth slowing.
What it means if you rent
- Check your renewal against similar advertised rooms before agreeing to an increase.
- Know the rules. Your state's tenancy authority sets how often and how much rent can rise.
- Sharing cuts costs. A room is far cheaper than renting a whole place alone.
What it means if you own your home
Every rise adds to repayments. Renting out a spare room is one of the simplest ways to bring in extra income without moving. Check tax and any lender or strata rules first.
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- ABC News: RBA lifts interest rates to highest level in 18 years (3 Nov 2026)
- Reserve Bank of Australia
- ABS: CPI rose 4.3% in the year to September 2026
Figures are from the sources above at the time of writing. This article is general information, not financial or legal advice.