Rates up by how much?

Prospector’s Corner

The headlines that matter

All four big banks now forecast back-to-back rate hikes in March and May, taking the cash rate to 4.35%. A Reuters poll found 23 of 30 economists expect a hike on 17 March. Mortgage repayments on a $1M loan would rise roughly $453/month from pre-February levels. (Canstar | Reuters)

Negative gearing and CGT overhaul on the budget radar - the Property Council fired a warning shot over rumoured plans to cap negative gearing at two properties and cut the CGT discount from 50% to 33%. CEO Mike Zorbas said changes would worsen the rental supply crisis. (MPA)

Australia’s housing stock hit $12.3 trillion - ABS data confirmed the total value of residential dwellings crossed $12 trillion for the first time, up $384.8bn in Q4 2025. National mean dwelling price: $1.07M. Western Australia led with +7.8% quarterly growth. (ABS)

SA election early voting opened 14 March - housing dominates the final week. Labor pledges 13,500 new homes/year and a $1bn fast-track fund; Liberals counter with $480M in stamp duty exemptions for first-home buyers. Polling day: 21 March. (ABC News)

Inflation expectations hit a three-year high of 5.2% - the Melbourne Institute’s March survey showed consumers bracing for more rate pain. More than 75% of respondents expect rates to rise in the next 12 months. (Yahoo Finance)

NAB Housing Monitor: Sydney and Melbourne flat - combined capital city dwelling prices rose 0.6% in February (+9.6% annually), but the gains came entirely from mid-sized capitals. Business confidence turned negative for the first time in 11 months. (NAB)

Apartment approvals slumped 24.5% in January - total dwelling approvals fell 7.2% to 14,564, running 27% below the 20,000/month pace needed for the National Housing Accord. The supply Australia needs most is drying up fastest. (ABS)

In the Boardroom

Opinion

The RBA meets Tuesday. Markets say a hike is almost certain. Here is what the numbers actually show.

ASX 30-day interbank cash rate futures for March are implying a cash rate of roughly 3.93%. The 6-month overnight index swap rate is pricing in around 1.6 hikes over the next half-year.

In plain English, the bond market is not just expecting Tuesday’s hike - it is already looking past it to May.

All four majors shifted to a March-plus-May call this week, forecasting a terminal rate of 4.35%. CBA’s Belinda Allen called the March board debate “lively.” NAB is not pencilling in a cut until August 2027. Westpac says November 2027. Let that land for a moment: the big four think the earliest relief is 18 months away.

For property, each 25bp hike strips roughly $13,000–$18,000 of borrowing capacity from a median-income buyer.

Sources: ASX RBA Rate Tracker, Reuters, Canstar, Westpac IQ, RBA

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For the Data Nerds

Auction Clearance Rates - W/E 14 Mar (Preliminary)

City	Prelim Rate	Prior Wk	Auctions
Sydney	68.3%	70.6%	1,307
Melbourne	63.5%	62.1%	1,324
Brisbane	43.5%	~51%	166
Adelaide	72.4%	~70%	164
Canberra	59.0%	~57%	139

Source: Property Update, Domain. ⚠️ These are preliminary Saturday-evening numbers. Final rates publish Thursday 20 March and typically revise 3–5 points lower.

This Week’s Numbers

Total value of dwellings crossed $12 trillion for the first time - the ABS reported $12.307 trillion at December 2025, up $384.8bn (+3.2%) in a single quarter. National mean dwelling price hit $1.075M. WA led with +7.8% quarterly growth, crossing the $1M mark. (ABS)

Consumer sentiment edged up 1.2% to 91.6 in March (still pessimistic, sub-100). However, responses from the final three survey days as the Middle East conflict escalated averaged just 84. Over 75% of households expect rates to rise. (Westpac IQ)

NAB business confidence fell to −1 index points - the first negative reading in 11 months. Business conditions held at +7 (around the long-run average). Capacity utilisation remains elevated at 82.8%. (NAB)

Inflation expectations climbed to 5.2% in March (Melbourne Institute), up from 5.0% in February - the highest reading since 2023. This is the metric the RBA watches closely to gauge whether expectations are becoming “unanchored.” (Yahoo Finance)

On the Market

ASX Property Weekly Wrap

The S&P/ASX 200 A-REIT Index (XPJ) fell 4.96% this week to 1,542.1 - its worst week in months. The sell-off was driven by hawkish RBA repricing (markets now pricing ~75% probability of a March hike), surging oil prices (Brent above US$100/bbl), and a broader ASX 200 decline of roughly 2.5%. Real estate was among the hardest-hit sectors. (Yahoo Finance)

★ STAR OF THE WEEK Lifestyle Communities (LIC) surged +11% after US operator Hometown America acquired a 9.8% stake (~$58.5M at $4.92/share) from HMC Capital entities. Hometown described itself as a long-term investor but said it is not currently considering a takeover. Citi analysts noted the stake keeps M&A discussions alive. (Kalkine)

National Storage REIT (NSR) - released its scheme booklet for the Brookfield/GIC takeover (A$2.86/security cash). Independent expert Kroll found the scheme in the best interests of securityholders. Vote on 15 April, expected implementation 8 May. Shares held flat at ~$2.77, pinned to the offer. (ASX)

HMC Capital (HMC) −7.5% - filed a “ceasing to be a substantial holder” notice for LIC after selling its stake to Hometown America. The company is actively recycling capital toward its energy transition strategy. (HMC)

Lendlease Group (LLC) −7.9% - dropped from the ASX 100 index in the March quarterly rebalance (effective 23 March). Shares are now down roughly 29% over 12 months. HY26 showed a statutory loss of $318M; management called FY26 “transitional.” (Motley Fool)

Digico Infrastructure REIT (DGT) −10.7% - removed from the S&P/ASX 200 index effective 23 March as its share price fell below the inclusion threshold. Significant selling pressure from passive fund unwinding. (MarketIndex)

GPT Group (GPT) −4.9% - lodged its 2026 AGM notice (10 April, The Mint, Sydney). Key items include election of new director Tony Osmond and CEO Russell Proutt’s LTI grant of 408,585 performance rights. (MarketIndex)

Dexus (DXS) −5.7% - on-market buyback update filed 9 March. The 10% buyback program (activated with HY26 results) is progressing. (Intelligent Investor)

Region Group (RGN) −4.1% - on-market buyback update filed 13 March. New CEO Greg Chubb took the reins in March. (MarketIndex)

Mirvac Group (MGR) −5.2% - routine director’s interest notice for CEO Campbell Hanan. No material operational news. (Mirvac)

Charter Hall Group (CHC) −9.7% - one of the heavier falls in the sector. No new material announcements this week. The broader platform (CLW, CQR, CQE) was similarly quiet. (Charter Hall)

Abacus Group (ABG) flat at $1.03 / Abacus Storage King (ASK) −3.5% - market continues to watch the potential internalisation of ASK’s management function, announced in early February and described as being at an “early stage.” (Abacus)

Goodman Group (GMG) −6.1% - no announcements. The industrial logistics giant fell with the broader tech/growth sell-off.

Stockland (SGP) −4.1% | Scentre Group (SCG) −2.8% | Vicinity Centres (VCX) −0.4% - no material news. Broad-based selling across the retail REIT space.

Centuria Capital (CNI) −8.0% | Centuria Office REIT (COF) −1.0% | Centuria Industrial REIT (CIP) −4.4% - no new announcements. CNI took a heavier hit on rate sensitivity.

Aspen Group (APZ) −11.6% - sharpest fall in the sector. No specific negative news; the decline appears to be mean-reversion after a 130% twelve-month run to its 52-week high on 2 March.

Peet Ltd (PPC) −10.6% | Cedar Woods (CWP) −6.3% - WA-exposed developers sold off heavily as rate expectations weighed on the residential growth trade.

Ingenia Communities (INA) −3.2% | GemLife Communities (GLF) −1.8% - land lease peers held up better than the broader sector.

PEXA Group (PXA) −5.4% - change in substantial holder filed 12 March; no operational news. Fell in line with the sector.

Qualitas (QAL) −6.6% | Dexus Industria (DXI) −5.5% | Charter Hall Long WALE (CLW) −3.5% | Charter Hall Retail (CQR) −2.5% | Charter Hall Social Infrastructure (CQE) −7.8% - no material news across the Charter Hall sub-funds and Dexus platform.

Arena REIT (ARF) −3.6% | BWP Trust (BWP) −0.8% | Growthpoint Properties (GOZ) −1.8% | Waypoint REIT (WPR) −2.4% | HomeCo Daily Needs (HDN) −2.4% - defensive retail and essential services REITs outperformed the index.

Cromwell Property (CMW) flat at $0.41 | GDI Property (GDI) −3.3% - low-liquidity office plays largely treading water.

Dexus Convenience Retail (DXC) +1.1% | Eureka Group Holdings (EGH) +1.9% - the week’s only gainers. DXC’s defensive convenience/fuel lease structure and EGH’s affordable retirement living positioning provided shelter in the sell-off.

Settlement Day

Deals & M&A

ADIA sold the Novotel and Ibis Darling Harbour complex to Wentworth Capital for A$390M - 781 rooms on a 1.5ha waterfront site at roughly $499k/room, acquired at a 6.0% yield and about 50% below replacement cost. Wentworth (founded by ex-Blackstone/Mirvac executives) deployed from its Fund I. Settlement expected April 2026. (Mingtiandi)

OUE REIT acquired a 19.9% interest in Salesforce Tower, Sydney for A$195.5M - the Singapore-listed REIT bought from Mitsubishi Estate at an implied property value of A$357.2M. The 55-storey premium office tower at 180 George Street is 99.2% occupied with a 5.5-year WALE. (Development Ready)

April Group and MaxCap acquired the RPAH Medical Centre in Newtown for A$117M - Australia’s largest individual healthcare property transaction in three years. The 7,231 sqm purpose-built facility is 100% leased at a 6.75% initial yield, adjacent to Royal Prince Alfred Hospital. (MaxCap)

Colliers sold two Perth neighbourhood centres to Harmony Property Investments for A$65.2M - Carramar Village ($32.15M) and Trinity Village, Alkimos ($33.07M), part of a broader Q1 2026 WA retail campaign totalling $118M+. Over 550 enquiries and 23 formal offers across the three campaigns. (Commercial Ready)

Pace Development Group acquired a Windsor (Melbourne) development site for A$40M - bought from the Presentation Association Victoria. Inner-Melbourne developer appetite continues despite broader market softness. (Development Ready)

What’s Settling Next Week

🏛️ RBA Board Decision - Tue 18 Mar, 2:30pm AEDT - the main event. All four major banks expect a 25bp hike to 4.10%. A Reuters poll puts 23 of 30 economists in the “hike” camp. Governor Bullock’s 3:30pm press conference will signal whether May is also live. (Reuters)

📊 RBA Financial Stability Review - Wed 19 Mar - released twice a year. The first since October 2025. Expect the RBA to flag household debt resilience, mortgage stress, and housing market risks under the renewed tightening cycle. (RBA)

💼 ABS Labour Force Report - Thu 20 Mar - February 2026 employment data. Markets expect unemployment to hold at 4.1%. A strong result cements the May hike; any softening injects doubt. (IG)

🏠 South Australia State Election - Sat 21 Mar - housing is the top policy battleground. The result will determine whether Labor’s supply-focused approach or the Liberals’ demand-side stamp duty cuts prevail. Polls suggest a tight race. (ECSA)

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