Two Rate Hikes, Record Profits, and the Markets That Didn't Blink
March 2026 delivered consecutive RBA hikes to 4.10%, geopolitical shocks, and the sharpest clearance rate decline in months. Yet 95.9% of resales are profitable, vacancy sits at 1.1%, and supply-constrained markets barely flinched. Here's what the data actually says.
March 2026 was the month that tested investor nerve on every front. Two RBA rate hikes in eight weeks. A geopolitical conflict pushing oil above US$119/barrel. The sharpest auction clearance decline in six months. Headlines that screamed crisis.
And yet: 95.9% of all property resales were profitable — a 20-year high. The median profit was a record $365,000. Vacancy sits at 1.1% nationally — well below the 2.5-3.0% long-term average. The structural housing shortfall stands at 1.3 million dwellings. And supply-constrained markets like Brisbane, Perth, and Adelaide barely flinched.
This is the full March picture — the positives, the negatives, the risks, and what investors should plan for in the months ahead. No spin. Just the data.
March 2026 At a Glance
- RBA hiked twice in 8 weeks: February to 3.85%, March 17 to 4.10%. Cash rate at highest level since 2024.
- National clearance rate fell from 68.9% (Mar 1) to 60.9% (Mar 29) — 4,062 auctions in the pre-Easter super week.
- Cotality Pain & Gain Report: 95.9% of resales profitable (highest in 20 years). Median gain: $365,000.
- Two-speed market: Perth +22% annual, Brisbane +17.3%, Adelaide +10.9%. Melbourne -2.8% YoY.
- Iran conflict pushed oil above US$119/barrel. ASX shed $100 billion. But property's illiquidity acted as a circuit breaker.
- National vacancy: 1.1% (Feb SQM). Perth 0.6%. Adelaide & Brisbane 0.8%. Rate hikes tighten rentals further.
- HIA modelling: proposed CGT/negative gearing changes would reduce housing supply. No legislation passed — proposals only.
- Employment strong: +49,000 jobs in February. Record labour force participation at 66.9%. Unemployment at 4.3%.
1. The Auction Market: A Month of Declining Clearance
March's auction market told the story of two rate hikes in eight weeks. Combined capitals clearance traced a clear downward arc:
| Week | Combined | Sydney | Melbourne | Brisbane | Adelaide | Context |
|---|---|---|---|---|---|---|
| Mar 1 | 68.9% | 65.5% | 70.4% | 74.8% | 76.0% | Pre-hike baseline |
| Mar 8 | 72.1% | 74.3% | 67.9% | 72.1% | 81.0% | Labour Day inflated — low volume |
| Mar 15 | 66.6% | 65.1% | 66.9% | 65.9% | 84.0% | RBA hike day (Mar 17) |
| Mar 22 | 62.7% | 60.8% | 64.2% | 65.3% | 65.4% | First full post-hike weekend |
| Mar 29 | 60.9% | 57.9% | 63.5% | 58.9% | 69.2% | Pre-Easter super week — 4,062 auctions |
Sources: Cotality auction results (Ed. 20-23 + week ending Mar 29, 2026).
City-by-City March Summary
Sydney softened throughout March: 65.5% → 60.8% → 57.9% (1,518 auctions on the final weekend — the weakest capital). The APRA DTI 6x cap continues to compress borrowing in the $1.5M-$2.5M segment. 385 sold prior to auction but just 253 at auction (16.6% at-auction rate — well below Melbourne). 298 withdrawn (19.6% withdrawal rate) signals vendors pulling stock rather than accepting lower results. Sydney's house median of $1,607,046 is up 6.0% year-on-year, but monthly momentum is flat.
Melbourne broke its remarkable 7-week stability band (67.9-70.4%) to the downside, finishing March at 63.5% on the highest volume of any capital (1,887 auctions, 1,368 reported). The at-auction bidding rate of 42.0% (575 of 1,368) remains the strongest competitive signal of any city. 333 passed in, 166 withdrawn (8.8% withdrawal rate — notably lower than Sydney). House median $977,579 — down 2.8% year-on-year (Property Update), making Melbourne the only capital recording negative annual growth. Victoria's investor-unfriendly tax settings continue to weigh.
Brisbane demonstrated rate resilience through early March: 74.8% → 72.1% → 65.3%. The final weekend softened to 58.9% on 284 auctions — the pre-Easter volume surge testing buyer depth. 68 sold at auction, 35 sold prior. House median at $1,175,981 (+17.3% annual). Units surged +6.0% in just 3 months — outpacing houses. Olympic infrastructure, Cross River Rail, and 0.8% vacancy create a structural floor.
Adelaide was March's most interesting story. A 7-week streak above 76% clearance was broken on Mar 22 (65.4%), before recovering to 69.2% on the final weekend (190 auctions, 107 reported) — the highest of all capitals. 48 sold at auction (44.9% at-auction rate), just 23 passed in. House median $980,815 (+10.9% annual), with the lower quartile leading growth (+4.7% over 3 months). Adelaide's structural advantages — interstate migration, sub-$1M median, 0.8% vacancy — remain fully intact.
Perth remains a private-sale market (24 auctions this week). The real story: +2.3% monthly growth, +22.0% annual, median 10 days on market, listings 48% below 5-year averages. Lower quartile leading at +8.4% over 3 months. Vacancy at 0.6% (just 1,130 dwellings citywide) — tightest nationally. KPMG maintains +13% Perth forecast for 2026.
2. Record Resale Profitability: The Headline Most People Missed
While clearance rate headlines dominated the news cycle, the Cotality Pain & Gain Report for the December 2024 quarter delivered a data point that changes the entire narrative: 95.9% of all property resales were profitable — the highest level in 20 years.
| City | % Profitable | Median Gain |
|---|---|---|
| Brisbane | 99.9% | $500,000 |
| Adelaide | 99.4% | $445,000 |
| Perth | 98.6% | $430,000 |
| Hobart | 97.2% | $322,000 |
| Sydney | 93.3% | $430,000 |
| ACT | 93.8% | $325,000 |
| Melbourne | 91.5% | $324,000 |
Source: Cotality Pain & Gain Report, December 2024 quarter (published March 2026). Based on 102,000 resales.
Key takeaways: Houses were 98.1% profitable (median gain $428,000) vs units at 91.2% (median gain $246,500). Loss-making properties were predominantly inner-city units held for shorter periods — around 4 years, suggesting COVID-era peak purchases. Profitable properties had a median hold period of 9.2 years.
Regional markets showed 97.6% profitability with a median gain of $314,000, while lifestyle markets (Kiama NSW, Noosa QLD) led with gains exceeding $700,000.
The lesson: Time in market overwhelmingly delivers positive outcomes. The investors who lost money were concentrated in inner-city units bought at or near cycle peaks and sold within 4 years. Investors who held houses for 9+ years recorded near-universal profitability across every city.
3. RBA, Rates & the Macro Picture
March delivered the second consecutive RBA hike of 2026, bringing the cash rate from 3.85% to 4.10% on March 17. This was not universally expected — market pricing had implied only 30-35% probability.
What the Hike Costs You
For a $600,000 mortgage (25-year term), the cumulative impact of both 2026 hikes adds approximately $302/month vs the start-of-year position. For a $1M mortgage: $503/month additional. Variable investor rates now sit at 6.75-7.75% across major lenders.
Bank Forecasts: Where to From Here?
| Bank | Peak Rate Forecast | National Growth 2026 |
|---|---|---|
| CBA | 4.10% (peak) | +5% |
| Westpac | 4.35% | +5% |
| NAB | 4.35% | — |
| ANZ | 4.10% (peak) | +4.8% |
| SQM Research | — | 0-3% (downgraded) |
SQM Research's downgrade to 0-3% national growth is the most conservative major forecast. Louis Christopher specifically warned that Sydney could face -2% to -6% decline if rates reach 4.35%. This is worth taking seriously — SQM's track record on directional calls is strong.
Employment: The Anchor Holding the Market
February labour data was strong: +49,000 new jobs created, unemployment at 4.3%, and a record-high labour force participation rate of 66.9%. SA has the lowest unemployment at 4.0%; VIC the highest at 4.7%. Strong employment means mortgage defaults remain low despite rate increases — this is the single most important factor preventing a genuine market downturn.
4. Geopolitical Headwinds: Iran, Oil, and Australia's Paradox
A US-Israeli military campaign against Iran (commencing late February) pushed oil above US$119/barrel during March. The ASX shed $100 billion in a single session. Treasury modelling suggests Australian CPI could reach the mid-to-high fours if the conflict extends — increasing the probability of a May rate hike.
However, Australia's position as a net energy exporter creates a paradox. Surging oil and gas prices boost national income through LNG and coal exports — particularly benefiting WA, QLD, and NT economies. Shane Oliver (AMP chief economist) estimates that if oil stabilises around US$100/barrel, inflation could hit approximately 4.6%.
For property investors: Geopolitical risk is a tailwind for resource-state property markets (Perth, Brisbane, Darwin) while being a headwind for rate-sensitive markets (Sydney, Melbourne) via the inflation → RBA rate → borrowing capacity transmission channel. Australian residential property has weathered every major geopolitical crisis in the past 35 years (Gulf War, 9/11, GFC, COVID) with minimal disruption. Property's illiquidity creates a natural circuit breaker against panic selling.
5. Rental Market: Ultra-Tight and Getting Tighter
National vacancy sits at 1.1% (February 2026, SQM Research) — well below the 2.5-3.0% long-term average. Total vacant dwellings: 34,572. The rate hike paradox is in full effect: each rate increase pushes would-be buyers back into the rental pool, tightening vacancy further and supporting rents.
| City | Vacancy | Available Dwellings | Trend |
|---|---|---|---|
| Hobart | 0.5% | 132 | Tightest by rate |
| Perth | 0.6% | 1,130 | Stable — tightest major capital |
| Darwin | 0.6% | 144 | Sharp tightening from 0.8% |
| Adelaide | 0.8% | 1,203 | Critically tight |
| Brisbane | 0.8% | 3,002 | Tightening from 0.9% |
| Canberra | 1.1% | 688 | Major drop from 1.4% |
| Sydney | 1.3% | 9,491 | Tightening from 1.5% |
| Melbourne | 1.6% | 8,294 | Down from 1.7% |
Source: SQM Research, February 2026.
National combined capital asking rent: $782.57/week. Annual rent growth: combined +6.6%, houses +7.8%, units +4.6%. Perth and Adelaide landlords completing annual reviews with 6-8% rent increases.
6. Policy Risk: Negative Gearing & CGT Changes
HIA independent economic modelling released in March quantified the impact of proposed tax changes on housing supply. The findings are significant for investors planning their 2026-27 strategy.
| CGT Scenario ($300K gain, 37% marginal rate) | Tax Liability | Additional Cost |
|---|---|---|
| Current (50% discount) | ~$55,500 | — |
| Proposed (25% discount) | ~$83,250 | +$27,750 |
| Complete removal | ~$111,000 | +$55,500 |
Source: HIA independent economic modelling, March 2026. Read our full HIA analysis.
CBA estimates these changes would reduce annual property price growth by -0.9 percentage points by end 2027. The proposed cut-off date is 1 July 2026.
Important: As of March 2026, no legislation has been passed. These remain political proposals, not enacted law. However, investors should factor in the possibility when modelling exit strategies. The housing shortfall of 1.3 million dwellings, government charges comprising up to one-third of new construction costs, and ~2 million "mum and dad" landlords providing the majority of rental stock all argue against measures that would reduce investor participation.
7. What Investors Should Plan For: April & Beyond
Key Dates
- April 29: Q1 CPI data — the single most important data point for the May RBA decision. If trimmed mean CPI comes in above 3.2%, a May hike to 4.35% becomes probable.
- May 5: RBA rate decision (2:30pm AEST). The market is watching whether 4.10% is the peak or whether a third 2026 hike is needed.
- 1 July 2026: Proposed cut-off date for CGT/negative gearing changes (if legislated).
The Bull Case
- Record resale profitability (95.9%) proves the market's structural health
- National vacancy at 1.1% and tightening — each rate hike strengthens landlord income
- Housing shortfall of 1.3 million dwellings is not being addressed — building approvals at decade lows
- Employment remains strong (+49,000 jobs, 66.9% participation — both records)
- Supply-constrained markets (Brisbane, Perth, Adelaide) demonstrating genuine rate resistance
- Sentiment dip creates a wider negotiation window: ~~39% of properties not clearing at auction
The Bear Case
- Two rate hikes in 8 weeks with a possible third in May — borrowing capacity under sustained pressure
- SQM Research downgraded national forecast to 0-3%; Sydney faces potential -2% to -6%
- Geopolitical conflict sustaining oil above US$100/barrel adds inflation risk
- Melbourne declining -2.8% YoY with investor-unfriendly state tax settings
- Proposed CGT/negative gearing changes could reduce investor participation from July 2026
- APRA DTI limits compressing borrowing in Sydney and Melbourne premium segments
The Investor's Playbook
- 1Stress-test at 4.35% / 8.25% variable. This covers the worst-case scenario across all major-bank forecasts. If your cash flow works at that rate, you are insulated regardless of what the RBA does in May.
- 2Lean into supply-constrained markets. Perth (0.6% vacancy, +22% annual), Brisbane (0.8%, +17.3%), and Adelaide (0.8%, +10.9%) have structural demand floors that rate hikes cannot break.
- 3Use the sentiment dip for negotiation. With ~39% of properties not clearing at auction, pre-auction offers, passed-in negotiations, and vendor bid properties represent a wider buying window than existed at the start of March.
- 4Watch April 29 CPI closely. This single data point will determine the May rate decision and set the trajectory for Q3. If trimmed mean CPI softens below 3.2%, the rate cycle may have peaked.
- 5Don't sell into fear. Every geopolitical and rate shock in 35 years has been followed by recovery. The investors who sold during COVID missed 30-40% gains within 24 months. Property's illiquidity is a feature, not a bug.
Related Research
Sub-$700K Market Analysis
Investor loans up 64%, 48% targeting sub-$700K
HIANegative Gearing & CGT Impact
HIA modelling on housing supply impact
CotalityFeb 2026 Home Value Index
National values up 0.8%, $1M milestone
Want This Weekly?
This monthly analysis aggregates our weekly newsletter data. Get the full tactical breakdown — auction results, suburb-level opportunities, and investor strategies — delivered to your inbox every Saturday.
Frequently Asked Questions
No. Auction clearance rates have softened from the mid-to-high 60s to the low 60s after two consecutive RBA rate hikes, but this is an orderly repricing — not a crash. A sustained clearance rate below 55% across multiple weeks would signal genuine market stress. Brisbane, Perth, and Adelaide are still recording double-digit annual growth. National resale profitability is at a 20-year high (95.9%). The market is cooling in rate-sensitive segments (Sydney and Melbourne premium), but structural demand from population growth and a 200,000+ dwelling shortfall continues to support prices.
The February hike to 3.85% and March hike to 4.10% have had measurable but uneven effects. Combined capitals clearance fell from 68.9% at the start of March to 60.9% by month-end. The impact was most pronounced in Sydney (clearance fell below 61%) and Melbourne (broke its 7-week stability band). However, supply-constrained markets like Brisbane (65.3%), Perth (+22% annual growth), and Adelaide barely moved on fundamentals — confirming they are supply-driven markets, not sentiment-driven.
It depends on Q1 CPI data (due April 29). NAB and Westpac forecast a further hike to 4.35%, while CBA and ANZ believe 4.10% may be the peak. The Iran-driven oil price spike (above US$119/barrel) adds inflation risk — Treasury modelling suggests CPI could reach the mid-to-high fours if the conflict extends. Investors should stress-test all new acquisitions at 4.35% cash rate / 8.25% variable investor rate to cover the worst-case scenario.
The December 2024 quarter data showed 95.9% of all resales were profitable — the highest in 20 years. The median profit was a record $365,000. Brisbane led at 99.9% profitable with a median gain of $500,000, while Melbourne was lowest at 91.5%. Loss-making properties were predominantly inner-city units held for shorter periods (around 4 years — COVID-era peak purchases). The takeaway: time in market overwhelmingly delivers positive outcomes.
HIA modelling (March 2026) shows that reducing the CGT discount from 50% to 25% would increase tax liability on a $300,000 capital gain by approximately $27,750. CBA estimates the changes would reduce annual property price growth by 0.9 percentage points by end 2027. Critically, no legislation has been passed as of March 2026 — these remain proposals. The proposed cut-off date is 1 July 2026. Reduced investor participation would likely worsen the rental supply shortage, as approximately 2 million 'mum and dad' landlords provide the majority of Australia's rental stock.
Based on March 2026 data: Brisbane (houses +17.3% annual, units +20.3%, Olympic infrastructure), Perth (+22% annual, 0.6% vacancy, resource economy tailwind from oil prices), and Adelaide (+10.9% annual, 0.8% vacancy, sub-$1M median) are the consensus top performers. Regional QLD corridors (Ipswich +19.7%, Logan +19%, Toowoomba +18.2%) offer sub-$700K entry with strong yields. Sydney and Melbourne face headwinds from APRA DTI limits and consecutive rate hikes — though Melbourne's deep discount to other capitals creates a potential contrarian case for patient investors.
Melbourne is the weakest major capital in March 2026: median prices are down 2.8% year-on-year (the only capital declining), clearance rates are softening, and Victoria's investor-unfriendly tax settings (vacant land tax, higher land tax, COVID debt levies) create additional headwinds. However, Melbourne's house median ($977,579) is now below Adelaide's — a historic first — and the 42.7% at-auction competitive bidding rate shows buyers who attend are still competing hard. For investors with a 7-10 year horizon, Melbourne at current prices may represent a contrarian opportunity, particularly in the Metro Tunnel western corridor (Sunshine, Footscray) where infrastructure is creating structural demand.
The US-Israeli military campaign against Iran pushed oil above US$119/barrel in March, triggering a $100 billion single-day ASX loss. For property, the impact is nuanced: higher oil prices add inflation risk (potentially forcing a May RBA hike), but Australia as a net energy exporter sees offsetting benefits — particularly in resource-state economies (WA, QLD, NT). Perth and Darwin property markets could see accelerated demand from resource sector employment. Historically, Australian property has weathered every major geopolitical crisis (Gulf War, 9/11, GFC, COVID) with minimal disruption, as property's illiquidity creates a natural circuit breaker against panic selling.