Cash Rate at 4.10% — What It Means for Peninsula Buyers and Sellers

Two rate hikes in five weeks.

The RBA lifted the cash rate to 4.10% in March 2026,
following a February increase, the first back-to-back hikes since mid-2023. The
decision was tight, five votes to four, and markets are pricing in roughly a 62% chance
of another hike in May.
For anyone buying or selling on the Mornington Peninsula right now, this isn’t abstract
monetary policy. It’s the number that determines what a buyer can borrow, what they’ll
pay each month, and ultimately how much competition your property attracts on auction
day.

What the numbers actually look like

On a $750,000 variable rate mortgage, the two consecutive hikes add approximately
$230 per month to repayments — around $2,760 a year. Scale that to a $1 million loan
(roughly the Peninsula median) and you’re looking at over $300 per month in additional
costs since January.
Borrowing capacity has also contracted. Lagos Financial estimates that since the start
of 2026, the average household’s borrowing power has fallen by roughly $36,000 — and
if the forecast May hike proceeds, that figure moves closer to $54,000.
For a Peninsula buyer stretching to reach a property in Mt Eliza or Mornington, that’s the
difference between being in the running and sitting on the sidelines.

Why is the RBA hiking again?

Three things converged. Underlying inflation remained sticky, with trimmed mean CPI
tracking at 3.3% — well above the RBA’s 2–3% target. The labour market stayed tighter
than expected, with unemployment sitting lower than forecast. And then the Iran
conflict escalated, closing the Strait of Hormuz and sending oil prices through $100 a
barrel, which flowed directly into fuel costs.
Governor Bullock was direct: there is a material risk that inflation remains above target
for longer than anticipated, and the Board was unwilling to wait.

What this means if you’re selling

The buyer pool is more price-sensitive than it was six months ago. That doesn’t mean
it’s disappeared — buyer sentiment on the
Peninsula has actually strengthened, with both permanent-home and holiday-home
purchasers re-engaging. But the composition has shifted. Buyers are doing harder
sums, borrowing less, and walking away from properties that feel overpriced relative to
recent comparable sales.
For vendors, the message is clear: pricing accuracy matters more than ever. The days of
relying on auction-day energy to push a result well beyond the guide are narrowing,
particularly in the sub-$1.5 million bracket where borrowing capacity constraints bite
hardest.

What this means if you’re buying

Your borrowing power has dropped, but so has competition in some price brackets.
Several Peninsula suburbs — including McCrae, Dromana, and Capel Sound — have
recorded median price drops of up to 3.2%, and ex-rental stock is adding supply to the
market as investors exit under land tax and regulatory pressure. If your pre-approval still
holds, you may find less resistance than you expected.
Before the next RBA meeting on 5 May, it’s worth getting your borrowing position
reviewed. If you locked in a fixed rate during the 2025 cuts, check when that term
expires, many borrowers coming off two or three-year fixes are about to face a
significant payment shock.

At HIVE Realty, we work closely with our clients and their brokers to make sure pricing
and timing decisions are grounded in what the market is actually doing. If you’d like to
talk through your position, get in touch.