Answering: If the RBA lifts rates again at its 29 September 2026 meeting, what happens to a nine-bed co-living property’s cash position compared with a standard rental?
Estimated reading time: 10 min read
If the Reserve Bank lifts the cash rate at its meeting on Tuesday 29 September 2026, a standard rental bought at today’s Melbourne prices has almost nothing in reserve to absorb it, while a nine-bed co-living property built on comparable numbers is already carrying roughly $134,010 a year more gross income before the decision is even made. Average figures based on most recent projects. The cash rate has sat at 4.35 per cent since the Board’s 5 May 2026 increase, the third rise in a row, and has been held twice since, most recently on 11 August 2026, with the next call due at 2.30pm AEST on 29 September. The Harmony Group’s team brings experience spanning 200+ high-yield and specialist accommodation projects, and Harmony’s own delivered co-living projects have averaged a historical 10.8 per cent gross yield, a result from the past, not a promise about the next one.
If you are holding a variable-rate mortgage and watching the calendar tick toward the 29th, the maths has probably already started running in your head: another 0.25 points, another few hundred dollars a quarter, on top of a rental that barely covers itself most months.
The Reserve Bank has not decided anything yet, and neither has anyone else. The major banks are themselves split, from a September rise to a hold through year end (the full bank-by-bank picture is set out below), which is exactly why the arithmetic on your own numbers matters more than anyone’s guess, including ours.
Key Insights
The RBA’s next decision lands at 2.30pm AEST on Tuesday 29 September 2026, with the cash rate at 4.35 per cent and the major banks split on what happens next, from a September rise to a hold through year end. Average figures based on most recent projects: a nine-bed co-living property’s $179,010 gross annual income sits $134,010 a year above a standard rental’s $45,000, a gross-income gap many times the size of what a single 0.25 point rise costs on a $600,000 loan. Every new loan is already stress-tested at 3 percentage points above the actual rate under APRA’s serviceability buffer, so a good part of the rate-rise question is already priced into what a lender will approve.
Table of Contents
- What the 29 September RBA Decision Can Actually Change
- How a 0.25 Point Rise Hits a Standard Loan
- The Cash Position of a Standard Rental Under a Rate Rise
- The Cash Position of a Nine-Bed Co-Living Property
- Why Lenders Already Buffer for a Rate Rise
What the 29 September RBA Decision Can Actually Change
The cash rate is the interest rate the Reserve Bank targets for overnight loans between banks. It is not your mortgage rate directly, but lenders move variable home loan rates up and down with it.
The RBA serviceability buffer is the margin, currently 3 percentage points, that every Australian lender must add to a loan’s actual interest rate when testing whether a new borrower can afford it.
The Reserve Bank increased the cash rate three times in the first half of 2026, in February, March and May, taking it to 4.35 per cent. It has held there for two meetings since, in June and again on 11 August. The next decision is due at 2.30pm AEST on Tuesday 29 September 2026, with a media conference to follow at 3.30pm. Nobody outside the Board knows what that decision will be, including The Harmony Group, including us, and including the banks publishing forecasts this week.
What the major banks are saying, as forecasts rather than certainties:
- NAB: a 25 basis point rise in September, taking the cash rate to 4.60 per cent.
- CBA: a rise expected in November, to 4.60 per cent.
- ANZ: a rise expected in November, to 4.60 per cent.
- Westpac: the cash rate holds at 4.35 per cent through the rest of 2026.
Four banks with four different calls is the clearest sign that 29 September is a genuine toss-up, not a formality. That uncertainty is exactly why the more useful question is not which forecast turns out right. It is what your own numbers can absorb either way, and that is a comparison you can run today with figures that do not depend on the RBA at all. For a nine-bed co-living property, that means nine separate room leases under specialist management rather than one household’s rent, which is the mechanism behind the gross income figures compared below.
How a 0.25 Point Rise Hits a Standard Loan
Every home loan approved in Australia is already assessed well beyond today’s rate. Under APRA’s mortgage serviceability buffer, lenders must test a new borrower’s ability to repay at 3 percentage points above the actual loan rate, so a loan priced at, say, 6.5 per cent is assessed as if it were 9.5 per cent. A single RBA move of 0.25 points does not change that buffer. It changes what a borrower actually pays each month, not what they were approved to handle.
On a $600,000 loan with 25 years remaining, a common benchmark loan size in current rate coverage rather than the borrowing either property in this comparison would actually carry, a straightforward principal-and-interest calculation puts a 0.25 percentage point rise at a little over $90 extra a month, a little over $1,100 a year. That is not a large number on its own. It becomes a large number only when it lands on a rental that was already close to break-even before the rise.
From February 2026, APRA has also capped the share of new lending written to borrowers with a debt-to-income ratio of six or more at 20 per cent of a lender’s book, applied separately across owner-occupier and investor portfolios. For an investor weighing a purchase now, the practical effect is that a property’s own rental income carries more weight in a lender’s decision than it used to. A nine-bed property’s income is drawn from nine separate room leases under specialist management, not one tenant’s rent, which is worth understanding before you compare how a co-living property is actually financed.
The Cash Position of a Standard Rental Under a Rate Rise
On average figures based on most recent projects, a standard investment property at a $1.5 million purchase price rents for around $865 a week, roughly $45,000 a year in gross rent, a 3 per cent gross yield. A $1,100 a year increase in loan repayments from one 0.25 point rate rise is close to 2.5 per cent of that entire gross rental figure, before council rates, insurance, agent fees, land tax or a single repair are paid.
At a 3 per cent gross yield, there was not much room in the number to begin with. A property already running close to break-even, or negatively geared, absorbs a rate rise directly against the owner’s own income. That is part of why investors holding established property bought after 7:30pm on 12 May 2026 are looking harder at the arithmetic, since the 2027 negative gearing changes, which exempt new builds, remove the option of offsetting a loss like this against salary from 1 July 2027, subject to the passage of legislation. None of this means a standard rental stops working as an investment. It means the margin gets tighter with every rate rise, and there is very little gross income sitting between the rent and the repayment to begin with.
The Cash Position of a Nine-Bed Co-Living Property
On the same average-figures basis, a nine-bed, nine-bathroom, single-storey co-living property runs to a base project cost of $1,574,000, or $1,650,250 including additional considerations, with rooms renting at around $380 a week each (an average of $382.50 across the nine rooms) for a gross annual income of $179,010, an 11.36 per cent gross yield on the base project cost. That is $134,010 a year more gross income than the standard rental above, on a property built at a broadly comparable outlay, well over one hundred times the extra cost of a single 0.25 point rate rise on a $600,000 loan.
| Gross income comparison | Standard rental (~$1.5m) | Nine-bed co-living |
|---|---|---|
| Weekly rent | $865 (whole property) | Around $380 per room, 9 rooms |
| Gross annual income | $45,000 | $179,010 |
| Gross yield | 3% | 11.36% on $1,574,000 base project cost |
This is a gross-income comparison, not a promise about what lands in your account after loan repayments, management fees and other costs, which vary by investor and are not published here. What is published, and historical rather than predictive, is that Harmony’s delivered co-living projects have averaged a separate 10.8 per cent historical gross yield (distinct from the 11.36 per cent figure above), with occupancy held above 98 per cent through specialist property management, and 93 per cent of projects meeting or exceeding their projected income.
The minimum entry point is $600,000 in cash, usable equity or a combination of both. That is the investor’s own contribution, not borrowed money, and is separate from the $600,000 loan used in the repayment example earlier, which is worth working through against how much usable equity you actually have before comparing options further.
Why Lenders Already Buffer for a Rate Rise
Because every lender already tests new borrowing at 3 percentage points above the loan rate, the practical effect of the RBA’s decision on 29 September is smaller than the headline suggests for anyone already approved under current rules. What changes is the number on the monthly statement, not the yes-or-no on the loan itself.
Where a rate rise matters more is serviceability on the next purchase. Under APRA’s debt-to-income cap, a lender can write no more than 20 per cent of new investment lending to borrowers at six times income or more, so a property’s own rental income increasingly does some of the work that used to sit entirely on the borrower’s salary. A higher gross income figure, historical and property-specific rather than promised, is one more input a lender or broker weighs, whichever way the RBA moves. If the Board holds or eventually cuts instead, the same comparison runs the other way, which is covered separately in our look at what falling rates do to co-living returns.
Whichever way the Reserve Bank moves on 29 September, the comparison that matters is the one you can run today: a standard rental’s thin gross margin against a nine-bed co-living property’s wider one, on historical figures rather than a forecast. If co-living is not the right fit for your equity position or your goals, we will tell you so rather than sell you a property.
For a deeper look at holding property through a higher-rate environment, read our guide to whether higher rates change property investment returns.
Frequently Asked Questions About the September Rate Decision
Q: Has the RBA decided to raise rates on 29 September 2026?
A: No. The Reserve Bank’s Board meets on 28 and 29 September 2026 and announces its decision at 2.30pm AEST on the 29th. As of publication the cash rate is 4.35 per cent, unchanged since the Board’s 5 May 2026 increase and held again at its most recent meeting on 11 August 2026. NAB is forecasting a rise to 4.60 per cent in September, CBA and ANZ expect a rise in November, and Westpac expects a hold, four bank forecasts and no confirmed outcome.
Q: How much would a 0.25 percentage point rate rise cost on my mortgage?
A: On a $600,000 loan with 25 years remaining, a standard principal-and-interest calculation puts a 0.25 percentage point rise at a little over $90 extra a month, around $1,100 a year. The exact figure depends on your loan size, term and current rate, so use this as a guide and check your own numbers with your lender.
Q: Does a nine-bed co-living property protect an investor from rate rises?
A: Not automatically, and The Harmony Group will not tell you it does. What the labelled figures show is a wider gross-income buffer, $179,010 a year against a standard rental’s $45,000, on average figures based on most recent projects, plus a historical 10.8 per cent average gross yield across Harmony’s delivered projects and occupancy held above 98 per cent through the property management partners. Those are historical results, not a guarantee about your own loan or the next rate decision.
Q: What is the APRA serviceability buffer, and why does it matter right now?
A: It is the 3 percentage point margin every Australian lender must add to a loan’s actual rate when testing whether a new borrower can afford it, so a loan priced at, say, 6.5 per cent is assessed as if it were 9.5 per cent. Because the buffer already exists, a single RBA move changes your repayment more than it changes whether you would still qualify for the loan.
Want to Learn More?
The Harmony Group’s team brings 15 years of specialist experience, and that team experience spans 200+ high-yield and specialist accommodation projects. The approach stays the same regardless of which way the RBA moves on 29 September: clear figures, historical results labelled as historical, and an honest answer about whether co-living suits your own equity position.
Citations
- “2026 Monetary Policy Board Meeting Dates”: The Reserve Bank of Australia confirms the Board meets on 28 and 29 September 2026 and announces its decision at 2.30pm on the second day, with a media conference to follow at 3.30pm. https://www.rba.gov.au/media-releases/2025/mr-25-02.html
- “Monetary Policy Decision, August 2026”: The Reserve Bank confirms the Board decided to leave the cash rate target unchanged at 4.35 per cent at its 11 August 2026 meeting. https://www.rba.gov.au/media-releases/2026/mr-26-19.html
- “What experts predict for the RBA’s September 2026 interest rate decision”: Aussie sets out each major bank’s individual forecast, NAB expecting a September rise, CBA and ANZ expecting a November rise, and Westpac expecting a hold through the rest of 2026. https://www.aussie.com.au/insights/news/expert-predictions-rba-rates/
- “Activating debt-to-income limits as a macroprudential policy tool”: APRA confirms the mortgage serviceability buffer remains at 3 percentage points and that, from February 2026, lenders may write no more than 20 per cent of new investment lending to borrowers with a debt-to-income ratio of six or more. https://www.apra.gov.au/activating-debt-to-income-limits-as-a-macroprudential-policy-tool
Related Reading
- Will interest rates staying higher for longer kill property investment returns?
- How would 2026 interest rate cuts affect co-living investment returns and affordability?
- How do you actually finance a co-living property?
- How much usable equity do you have to invest?
- What do the 2027 negative gearing changes mean for property investors?
General information only. The Harmony Group provides general information about property and co-living investment, not personal financial, tax or legal advice, and does not hold an Australian Financial Services Licence (AFSL). It does not account for your objectives, financial situation or needs, so consider its appropriateness and seek advice from a licensed financial adviser, accountant or the ATO before acting. Past performance is not a guide to future results and historical figures may not be repeated. Any tax or regulatory measures described are announced rather than enacted and are subject to change.
