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
- The ABS September quarter 2026 Consumer Price Index released Tuesday 28 October showed headline inflation of 4.3% a year (quarterly rise 1.3%), up from 4.0% in the 12 months to August and above the 4.2% market consensus (ABS, Consumer Price Index Australia September 2026).
- The trimmed mean, the RBA's preferred underlying gauge, rose 1.0% on the quarter and 3.6% over the year, with the August monthly read revised down to 3.5% on updated seasonal factors.
- Housing was the largest contributor to the annual move at 5.2%, driven by electricity and new dwelling purchases. New dwelling prices rose 4.7% over the year, easing from 5.4% in the 12 months to August.
- Automotive fuel rose 23.6% a year and 9.4% on the month on higher world crude prices. The ABS excluded fuel from the trimmed mean, which is why the headline sits at 4.3% while the core sits at 3.6%.
- ANZ and Westpac both carry a 3 November 2026 call for a further 25 basis point move to 4.85% (InvestingLive, Westpac sees RBA hiking again in November). CBA and NAB sit on 4.60% as the current peak but both have called the November meeting live. The ANU RBA shadow board had a November hike at 62% probability before the CPI data landed (ANU shadow board).
- On a $750,000 investor variable loan at around 6.19%, a 25 basis point hike lifts the monthly repayment by roughly $119 on a 30-year P&I schedule and about $156 on an interest-only line. Pass-through from the Big 4 after 29 September landed on 9 October (Canstar, Big 4 rate hike update), so a 3 November move typically hits statements by mid-November.
- For a landlord on the 37% marginal bracket, the net after-tax cost of that $1,428 extra annual interest is about $900 a year. The deductible interest line still absorbs about 37 cents in the dollar of any further Big 4 pass-through.
- ABS CPI rents ran at 3.6% a year to July, well below the Cotality advertised-rents series at 5.7% a year to August. SQM had the national vacancy rate at 1.4% in September 2026 with Sydney unit rents turning down. The 4.3% all-items CPI headline is not an automatic rent review ceiling for a sitting tenant on a 12-month renewal.
- The Westpac-Melbourne Institute Consumer Sentiment Index for October was 80.4, with the post-RBA sub-sample at 67.2 (Westpac Money Matters). The household backdrop in front of the board on 3 November is softer than it was in September.
This article is general information only. It does not consider your personal circumstances and is not tax, credit or investment advice. Speak to a registered mortgage broker, tax agent or licensed property adviser before acting on any of the figures below.
The number the RBA now has in front of it on 3 November#
The Australian Bureau of Statistics released the September quarter 2026 Consumer Price Index at 11:30am AEDT on Tuesday 28 October. Headline CPI rose 1.3% in the quarter and 4.3% over the year (ABS, Consumer Price Index Australia September 2026). That is up from 4.0% in the 12 months to August and above the 4.2% that market economists had tipped going in. The trimmed mean, which strips out the volatile ends of the distribution, rose 1.0% on the quarter and 3.6% over the year. The August monthly trimmed mean was revised down from 3.6% to 3.5% on updated seasonal factors, so the September read is a one-tenth re-acceleration on the core measure, not a flat line.
The quarterly print is the one the RBA will anchor on in the 3 November decision. Monthly CPI data has only recently moved to a full basket, and the board has consistently said the quarterly cut is the cleaner signal. On that cut, both the headline and the trimmed mean are above the top of the 2% to 3% target band, and the trimmed mean sits further above target than the full-basket July monthly reading did going into the September 29 meeting.
The reaction in rate markets was immediate. The Australian dollar rallied on the print as traders moved toward a November hike call. The November 2026 OIS curve was pricing roughly a one-in-three November hike before the CPI landed and shifted sharply after it. Among the Big 4, ANZ already carried a November 25 basis point hike to 4.85% as the house view, and Westpac confirmed its own November call sits on the back of the same inflation and labour market read (InvestingLive, Westpac sees RBA hiking again in November). CBA and NAB sit on 4.60% as the published peak but have both described the November meeting as live. The CBA view is that November depends on the Q3 CPI print. That print has now landed above forecast.
What is actually driving the 4.3%#
The ABS gave three main sources for the annual rise:
Housing was the single largest contributor at 5.2% a year. The two components inside housing are electricity, where the end of the Energy Bill Relief Fund rebates fed back through retail power bills over the quarter, and new dwelling purchases by owner-occupiers. New dwelling prices rose 4.7% over the year, which is actually a step down from 5.4% in the 12 months to August as rebate-related base effects dropped out and construction cost inflation stabilised. Rents are inside housing but the specific CPI-rents sub-index moved more modestly, consistent with the national ABS series tracking at 3.6% a year to July.
Transport rose 8.7% a year, with automotive fuel the main driver. Fuel rose 23.6% over the year and 9.4% on the month on higher world crude prices. Brent crude moved from around US$80 at the start of the quarter to above US$100 by the end on supply-side tightening and geopolitics. The ABS excluded automotive fuel from the trimmed mean, which is why the trimmed mean sits at 3.6% while the headline sits at 4.3%. For an investor property, the fuel line is only indirect, feeding through to contractor callout costs and local trades pricing.
Services inflation was the quietest of the three but the one the RBA board watches most closely for persistence. Services ran a touch below the goods line at the headline level but a touch above it inside the trimmed mean. Insurance was still a material contributor at 10%+ annual growth on the home line, consistent with the IAG and Suncorp FY26 commentary on hazard overruns and premium repricing.
The practical signal is that the goods line is being pulled higher by a volatile fuel component that the RBA will discount. The underlying trimmed mean at 3.6% is the number that drives the policy call.
The 3 November mechanics#
The Reserve Bank of Australia board meets Monday 2 and Tuesday 3 November 2026, with the decision released at 2.30pm AEDT on 3 November. The September board decision was a unanimous 9-0 vote to lift the cash rate 25 basis points to 4.60% (RBA media release mr-26-27). The September minutes, released 13 October, said existing policy may not be sufficiently restrictive (Reuters via Yahoo Finance, 13 October 2026).
The board walks into the November meeting with four data points on the table:
- Q3 2026 CPI: headline 4.3%, trimmed mean 3.6%, both above forecast. In favour of a hike.
- September labour force: a soft print of 39,300 jobs lost with unemployment at 4.7%, released 16 October (Westpac data insight). This was the single piece of data arguing for a hold, and it is still on the table.
- Westpac-Melbourne Institute Consumer Sentiment October: a headline of 80.4 and a post-RBA sub-sample of 67.2 (Westpac Money Matters). Also a hold argument, but a weaker one, since the board has already made peace with the sentiment channel.
- ANZ-Roy Morgan Consumer Confidence: 67.7 in mid-October, 16.3 points below the same week a year earlier (Roy Morgan, 20 October 2026). Soft.
On balance, the CPI print is the piece of data that most directly contradicts a hold case. The trimmed mean does not come down to the top of the target band on current forecasts until well into 2027, and the September minutes already set the board up for a 'maybe not sufficiently restrictive' reading of the policy stance. The ANU shadow board had the November hike at 62% probability going into Tuesday's print. On market-implied odds, the probability lifted into the 85 to 90% range on the back of the CPI miss, consistent with coverage framing a hike as 'likely' and in some pieces 'all but priced in'.
The counterweight is political. 3 November is Melbourne Cup Day. A Melbourne Cup Day hike is unusual, not because the board flinches from the optics but because the board usually prefers moves either side of major events. The 2023 Cup Day hike broke that pattern. If the board does it again, it will do so because the data left no cleaner alternative.
The pass-through math on a $750,000 investor loan#
The practical read for a landlord is what a 3 November hike actually does to the investor variable rate stack. The Big 4 pass-through after the 29 September move was full and prompt. CBA, Westpac, NAB and ANZ each lifted standard variable rates by 25 basis points, with the changes applied over the week of 2 to 9 October (Canstar, Big 4 rate hike update). The pattern after a 3 November move would almost certainly be the same: full pass-through, applied within two weeks, hitting statements by mid-to-late November.
On a $750,000 investor variable loan at a current Big 4 investor rate around 6.19% on a basic variable product, a 25 basis point move takes the rate to 6.44%. On a 30-year principal-and-interest schedule:
- Current monthly repayment: approximately $4,593
- Post-hike monthly repayment: approximately $4,712
- Monthly increase: approximately $119
- Annual cash flow impact: approximately $1,428
On an interest-only product, the arithmetic is cleaner. The monthly interest-only payment on $750,000 at 6.19% is $3,869. At 6.44% it is $4,025. The monthly step is $156, and the annual step is $1,872. Interest-only is the common structure for investor borrowers in the first five years of a loan, so this is the number many landlords should run the numbers against.
Rescale for different loan sizes. On a $500,000 investor loan, the monthly P&I step is about $79 and the interest-only step about $104. On a $1 million loan, the monthly P&I step is about $159 and the interest-only step about $208. For a landlord carrying multiple loans, each additional $100,000 of borrowings adds roughly $16 a month to the P&I bill and $21 a month to the interest-only bill per 25 basis point move.
Across a 2 to 3 year hiking cycle, the cumulative effect becomes material. The cash rate was at 4.10% in October 2025. If the RBA goes on 3 November, it will have taken the rate to 4.85% in 13 months, a 75 basis point net lift. On that $750,000 investor loan, the cumulative annual cash flow impact over that period is around $4,284 on P&I and $5,616 on interest-only before any tax effect.
The deductible interest line keeps 37 cents in the dollar#
The partial offset for a landlord sits in the tax position. The ATO treats interest on a loan used wholly to purchase or hold an income-producing rental property as a fully deductible expense (ATO, rental expenses). On a 37% marginal tax rate, every extra dollar of deductible interest reduces income tax by 37 cents. On the 45% top bracket, every extra dollar reduces tax by 45 cents.
Applied to the $750,000 example above, the pass-through math shifts:
- Annual interest increase on P&I: $1,428. After-tax cost on 37% marginal rate: approximately $900. On 45% marginal rate: approximately $785.
- Annual interest increase on interest-only: $1,872. After-tax cost on 37%: approximately $1,180. On 45%: approximately $1,030.
The deduction value does not change the dollar amount leaving the account on the first of the month, but it does change the net-of-tax financial position across the full year. For a landlord running a negatively geared portfolio, the pass-through continues to be absorbed in part by the deductible interest line. The portion that is not absorbed is the portion that has to come from rent, savings, or the sale of another asset.
The structural reminder is that depreciation on second-hand plant and equipment in residential rental property has been locked out under the 9 May 2017 Division 40 rules. Interest is now the single biggest deductible line on most portfolios acquired post-2017, which is one reason the deductible interest offset remains the most powerful tax mechanic available to landlords in a rising-rate environment.
The rent review question#
The headline CPI number of 4.3% is going to show up in rent review conversations over the next 90 days. CPI-linked rent reviews are legal in every Australian jurisdiction subject to the usual notice periods, and the all-items annual CPI is the standard benchmark the clauses attach to. A landlord with a 12-month renewal cycle that lands between November 2026 and January 2027 now has a 4.3% headline anchor to use.
The practical question is whether that is the right anchor to use.
ABS CPI rents sat around 3.6% a year to July 2026, well below the Cotality advertised-rents series at around 5.7% a year to August (Cotality monthly chart pack). The gap between the two is the gap between what sitting tenants are paying under their current lease and what new tenants would pay to lease the same property today. SQM's September 2026 release had the national vacancy rate at 1.4%, up from 1.3% in August, with Sydney unit rents turning down for the first time this cycle (SQM Research). The market is still tight by historical standards but has stopped getting tighter.
Three practical calls for a landlord sitting on a rent review in the next 90 days:
First, benchmark the proposed rent against three live comparables on realestate.com.au or Domain, not against the 4.3% CPI headline. The CPI headline is one input. The local market level is the ceiling the review has to sit under.
Second, if the tenant has been in place for 24 months or more and the current rent is more than $50 a week below the market level, a 4.3% move is likely to leave money on the table. In that case, a market-level review is the better decision, with the tenant given adequate notice and the review clearly priced against documented comparables.
Third, if the current rent is already at or above the market level, a 4.3% move risks accelerating the move from this tenant to a vacancy. The Westpac-Melbourne Institute family finances sub-index for the past year printed at 66.9 in October (Westpac Money Matters). Tenants are running on the thinnest household budgets since the early 1990s on that measure. The marginal risk of a vacancy sits higher than the headline CPI number alone would suggest.
The 6-day calendar before the RBA call#
Over the next six days, a landlord has three operational decisions in front of them:
30 October to 2 November, self-lodger tax deadline. The 2025-26 return has to be lodged by Monday 2 November 2026 for self-lodgers. A return filed late is exposed to a failure-to-lodge penalty of up to $1,820 at the 1 July 2026 penalty unit of $364 (ATO failure to lodge on time). This is the harder deadline of the three, because it is binary. Interest line and depreciation schedule reconciliation is the single largest driver of accurate rental schedule lodgment.
3 November, 2.30pm AEDT, RBA decision. If the board moves, the Big 4 pass-through typically lands within two weeks and hits statements by late November. A landlord who was going to refinance into a lower product should have the refix paperwork ready to lodge the moment the decision is announced, so the new product is locked at the pre-move rate rather than the post-move rate. The window closes quickly on an announcement day.
By mid-November, rent review conversations. For leases rolling in December and January, the review notice typically goes out 60 to 90 days before the renewal date. The Q3 CPI print will be the number that anchors every one of those reviews. A landlord who has already done the comparable analysis will have a sharper line to walk into the conversation with than one who is working from the headline alone.
Running the numbers through to the FY27 line#
For most landlords, the three questions that matter are: what is the new monthly interest line, what is the after-tax annual position, and what is the new net cash flow after the rent review lands.
Running those three in one place is where propkt sits. Propkt tracks the mortgage interest line against the ATO rental schedule, categorises deductible expenses automatically against the current year's rules, applies the Big 4 investor rate sheet to the mortgage calculator, and lines the rent review against the local comparable rents. The post-CPI, pre-RBA window is the one where the November investor cash flow is actually set. The data match sees the file either way. The accountant will ask for the reconciliation in May. The time to tighten the record is now.