This article is general information only and does not constitute financial or tax advice. Consult a qualified tax professional for advice specific to your situation.
Key takeaways
- Headline CPI hit 4.6% in the year to March 2026, the highest since September 2023, up from 3.7% in February.
- The trimmed mean held at 3.3%, meaning underlying inflation is still sticky and well above the RBA's 2-3% target band.
- Automotive fuel jumped 32.8% in March alone, the biggest monthly move since 2017, driven by the Iran conflict and Strait of Hormuz disruption.
- All four major banks forecast another 25bp RBA hike on May 5. Westpac sees the cash rate peaking at 4.85%, the highest since the GFC.
- Housing inflation stayed at 6.5%, with electricity up 25.4% as government rebates rolled off, directly squeezing landlord holding costs.
The ABS released its March quarter 2026 Consumer Price Index this week, and there are no encouraging numbers in it. Headline CPI rose 4.6% in the year to March, up from 3.7% in February. That is the highest annual reading since September 2023 and a full percentage point above where the Reserve Bank wants it.
Last month, when the February CPI numbers came in at 3.7%, we said the data was "the last set of inflation numbers that will look anything like normal for a while." That call has now landed. The Iran conflict that began on 28 February has shown up in the March data with a 32.8% monthly jump in automotive fuel, the largest single-month move since 2017. Petrol, diesel, and premium fuel all repriced violently, and the rest of the inflation basket did not get cheaper to compensate.
For Australian landlords, the implications run in three directions: a near-certain RBA hike at the May 5 meeting, sticky housing inflation that is eating into cash flow, and a tax-time conversation that just got more complicated. Here is what the ABS data release actually says, and what to do about it.
The Headline Numbers
The headline CPI rose 1.1% in the month of March and 1.4% over the March quarter. The annual rate of 4.6% sits well above the RBA's 2-3% target band and represents one of the sharper monthly accelerations in recent years.
The trimmed mean inflation rate, which strips out the most volatile price swings and is the RBA's preferred gauge of underlying pressure, came in at 3.3% annually. Unchanged from February. That number matters because it tells you the inflation problem is not just oil. Even after you remove the fuel spike, prices across the broader economy are still rising faster than the RBA's target.
Headline inflation drove the news, but the trimmed mean is what the RBA Monetary Policy Board will be staring at when it meets on May 5.
Petrol, Diesel, and the Iran Conflict
The single largest contributor to the March move was transport, which rose 8.9% annually and 9.2% in the month of March alone. Within that, automotive fuel surged 32.8% in a single month, the steepest monthly increase the ABS has recorded since 2017.
The pump price moves were brutal:
- Regular unleaded: 171c to 228c per litre, up 33%
- Premium unleaded: 192c to 250c per litre, up 30%
- Diesel: 181c to 256c per litre, up 41%
Diesel is the one that hits landlords hardest, even if you do not personally drive a diesel vehicle. Tradies do. Plumbers, electricians, removalists, and lawn maintenance crews price their callout fees and quotes against fuel costs. A 41% jump in diesel translates into higher invoices for every maintenance job booked between now and the next quarter. If you are getting quotes for a bathroom renovation, gutter clean, or air-con service, expect them to be noticeably higher than they would have been in February.
The April federal fuel excise halving offers some relief at the bowser, but it does not undo the March data, and it does not help if your contractor's fuel costs were locked in earlier.
Housing Inflation Is Still Running at 6.5%
Housing inflation, which is the highest-weighted group in the CPI, came in at 6.5% annually in March. That is barely off February's 7.2% read, despite all the talk of construction cost stabilisation.
The electricity component is the standout. Power costs are 25.4% higher than 12 months ago because Commonwealth and state government rebates that artificially reduced household electricity bills through 2024 and 2025 are no longer in place. The headline number was always going to spike when the rebates rolled off, and now it has.
For landlords, electricity inflation matters in three places:
- Vacancy periods. Power that you pay between tenants is now 25% more expensive than the same gap last year.
- Bills-included leases. If your rental includes electricity, your margin just shrank.
- Maintenance pricing. Every contractor running tools, lights, and a workshop is paying more to keep them on. That feeds back into quotes.
New dwelling construction costs are also still climbing, which keeps pressure on renovation and improvement costs for landlords planning capital works. If you have been deferring a kitchen update or capital improvement, the cost is not getting cheaper.
Rents Are Rising Again
CoreLogic's March 2026 data shows national rents have re-accelerated. Annual rental growth lifted to 5.7% in March, up from 3.4% over the 12 months to June 2025. Combined capital city rents hit a record $680 per week. National vacancy sits at 1.6%, which remains historically tight.
For landlords with a property near or below market rent, the inflationary environment gives you a defensible reason to review the rate. Just make sure any increase complies with your state's notice periods and frequency rules. The rent increase guide covers the legal mechanics for each state, and you can model the dollar impact below.
Calculate Your Rent Increase
Plug in your current rent and proposed new rate to see the annual income difference, and confirm the maths before you send a notice.
Enter your current rent and proposed increase to see the breakdown.
A 5% increase on a $650 per week rental brings in roughly $1,690 in extra rent per year. Set against rising electricity, mortgage interest, and contractor costs, that is often the difference between cash-flow positive and cash-flow negative on a single property.
The May 5 RBA Decision
The RBA Monetary Policy Board meets on May 5, 2026. After the March 5-4 split decision that lifted the cash rate to 4.10%, the case for another move has only strengthened with the March CPI numbers in.
All four major banks now forecast at least one more 25 basis point hike at the May meeting, which would take the cash rate to 4.35%. Where they diverge is what comes next:
- CBA, NAB, ANZ: One more hike to 4.35%, then a hold for the rest of 2026.
- Westpac: Three more hikes (May, June, August), with the cash rate peaking at 4.85%, the highest level since the GFC.
The Westpac call is the most aggressive view from the Big 4, but it is consistent with what the trimmed mean is telling the RBA. Underlying inflation has refused to fall, and now it has a fuel shock layered on top.
For landlords with a variable rate investment loan, the practical question is what each scenario means for your monthly repayments. On a $500,000 loan, every additional 25 basis point hike adds roughly $80 per month. Three hikes is closer to $240 per month, or $2,880 per year. Across two properties, you are looking at $5,000 to $6,000 in additional annual interest costs.
Use the interest rate calculator to model your exact loan, or run the numbers in the mortgage repayment calculator at the new rate to see your repayment under each scenario.
What This Means for Tax Time
Higher costs hurt cash flow, but they also lift your tax-deductible expense base. Mortgage interest, council rates, electricity (where you pay it), insurance, and maintenance are all rising. For negatively geared landlords, those higher costs translate directly into a larger deductible loss, which reduces your taxable income at the marginal rate.
The catch is that the deduction is a fraction of the cost paid. A $1,000 increase in interest costs on a property held by someone in the 32.5% tax bracket reduces tax by $325, leaving $675 of cash flow pain unsoftened. You are still worse off in cash terms, just less worse off after tax.
The other catch is that you can only claim what you can substantiate. Higher costs without proper records means deductions you forfeit at EOFY. With June 30 less than two months away, the value of having every expense logged and categorised is rising every week.
The ATO's guide to rental property expenses covers what you can and cannot claim. The landlord expenses guide walks through the categories most landlords miss, and the EOFY checklist is worth reading before you next sit down with your accountant.
Stress-Test Each Property
The single most useful thing a landlord can do this week is run the numbers on each property at a 4.35% and 4.85% cash rate, with electricity costs up 25%, and contractor invoices priced 10-15% higher than this time last year. That is the realistic 2026 cost base. If a property tips from comfortably profitable to negative cash flow under that scenario, you want to know now, not at tax time.
What to Do This Week
You cannot control the RBA, the oil price, or the trimmed mean. You can control how clear a picture you have of your own position.
Update your expense records. Make sure every cost incurred this quarter is logged against the right property. Electricity, council rates, repairs, insurance premiums, agent fees if you use one, and any interest charges shown on your bank statements. The more current your records, the less scrambling you do at EOFY.
Re-baseline your cash flow. Run each property's numbers using April rates and current expenses. If the result has shifted materially since you last looked, you need a plan for the gap, whether that is a rent review, a mortgage conversation, or trimming discretionary maintenance.
Plan for the May decision. If the RBA hikes on May 5, your variable-rate repayment will move within weeks. Knowing your number in advance means no surprises when the lender's letter arrives.
The next CPI release is the May monthly indicator, due late May, which will start to show the impact of the April fuel excise halving. Until then, the March numbers are the operating reality.
Frequently Asked Questions
What was Australia's CPI for March 2026?
The ABS reported that headline CPI rose 4.6% in the year to March 2026, up sharply from 3.7% in February. The quarterly rise was 1.4% and the monthly increase was 1.1%. The trimmed mean, the RBA's preferred underlying inflation measure, held at 3.3%.
Will the RBA raise rates again at the May 2026 meeting?
All four major banks (CBA, NAB, ANZ, Westpac) now forecast at least one more 25 basis point hike at the May 5 meeting, which would lift the cash rate to 4.35%. Westpac goes further and tips three more hikes through to August, with the cash rate peaking at 4.85%.
How much did petrol prices rise in March 2026?
Automotive fuel rose 32.8% in the month of March alone, the largest monthly jump since 2017. Regular unleaded climbed from 171c to 228c per litre on average, with diesel jumping 41% from 181c to 256c per litre, driven primarily by the Iran conflict that began on 28 February.
Why is housing inflation still elevated in March 2026?
Housing inflation came in at 6.5% annually, with electricity costs up 25.4% as Commonwealth and state government energy rebates have rolled off. New dwelling construction costs and rents are also climbing, both of which feed into landlord holding costs and contractor pricing on maintenance work.
What does 4.6% inflation mean for negatively geared landlords?
Higher costs (interest, electricity, maintenance, insurance) flow through to bigger tax-deductible expenses on your investment property. That softens the cash flow hit but does not eliminate it. The deduction is a fraction of the cost paid, so cash flow gets tighter even when your tax bill goes down. Tracking every expense becomes more valuable, not less, when costs are rising fast.
Tracking every cost as it lands is the difference between an accurate deduction at EOFY and one you have to reconstruct from memory. Propkt logs each expense against the right property, ready to export for your accountant. Get started free.