Many buyers look at the rate news and reach one of two conclusions. Some think it makes sense to wait for cuts, then buy once the crowd has thinned. Others think it makes sense to buy before buyers return. Both views depend on facts that are moving, so it helps to check them first.
Where the cash rate sits today
The Reserve Bank lifted the cash rate target by 25 basis points to 4.85 per cent on 3 November 2026. Six members voted to increase the cash rate target while three voted to leave it unchanged at 4.60 per cent. It is the fifth hike to the cash rate in 2026, following increases in February, March, May, and September.
Whether cuts follow, and when, is open. One economist expects the cash rate to remain on hold after this move until 25 basis point cuts in August and November 2027. Other economists are less settled. ANZ sees a material risk the cash rate reaches 5.10% by December or February. The title's premise is a forecast, not a timetable. It makes more sense to plan around the numbers you can test today.
How SMSF borrowing has changed
For SMSF buyers, the rules have shifted. For LRBA arrangements entered into on or after 10 August 2026, an SMSF can only use an LRBA to acquire real property that meets the definition of business real property. Residential property is not business real property. Binding contracts to acquire real property exchanged before 10 August 2026 are unaffected, even where the contract settles or the borrowing is entered into after that date.
A fund can still buy residential property without borrowing. SMSFs can still buy residential property outright with fund cash, as the ban only applies to borrowing. On the wider market, one industry commentary puts SMSF borrowing at less than 0.5% of new residential property borrowing each year on average. That share suggests the change alone is unlikely to reshape competition across the market.
For new residential purchases, the structure commonly discussed is a unit trust that is unrelated to the fund, with the borrowing sitting in that trust rather than the fund. Whether a trust is related is a technical question. Confirm it with an SMSF specialist accountant or solicitor before relying on any structure.
Inside the fund, the tax settings also matter. A complying superannuation fund that follows the laws and rules for SMSFs qualifies for a concessional tax rate of 15%. Complying SMSFs are entitled to a capital gains tax discount of one-third if the relevant asset had been owned for at least 12 months. That discount effectively reduces the tax rate to 10 per cent on realised capital gains.
When buying now suits, and when it does not
Buying before any cuts may suit someone with the savings, borrowing capacity and a long hold period, who has tested the cash flow at the current rate. It may not suit someone whose budget only works if rates fall, or someone who has not yet confirmed the structure with the right professionals.
Waiting has costs too. Cash held while you wait earns interest, not rent, and a delayed purchase means a delayed asset. Nobody can time prices reliably, so the decision should not hinge on a guess about them.
Cash flow is the measure to test. Rental income should be realistic and backed by an independent rental appraisal, with vacancy periods built into the numbers. For buyers building a new home, HomePay is one finance option to compare. Under HomePay, no payments are due for the first 12 months during construction. The interest for those 12 months is borrowed, added to the loan, not waived, and standard repayments start after that. EWC is not the credit provider for HomePay, and EWC refers loans to its broker network without taking commission on any loan.
A worked example
This is an illustration, not a forecast. Take an SMSF in accumulation phase that holds an asset for over 12 months and sells it for a net capital gain of $100,000. With the one-third discount, two-thirds of the gain is taxed, which is $66,667. At the 15% fund rate, the tax is about $10,000, an effective 10% on the full gain. The real result depends on the fund's position, costs and the asset's cost base.
Interest costs work the same way. On a $600,000 loan, each 0.25 percentage point rise adds roughly $1,500 a year in interest, before any change in a lender's margin. That is the kind of figure to set against realistic rent and holding costs.
Once a member moves into the pension phase, different limits apply. The general transfer balance cap for 2026 to 27 is $2.1 million.
What to do next
- Ask an SMSF specialist accountant or solicitor whether the proposed trust is unrelated to the fund, and how the fund rules and tax treatment apply to your situation.
- Speak with a broker who specialises in SMSF or investment lending about borrowing options, including whether a unit trust loan suits your position.
- Speak with a licensed financial adviser about how the purchase sits alongside your super, insurance and cash reserves, and with a tax adviser about capital gains.
If you want to talk through the structure and the cash flow numbers, you can book a free call. EWC is a property firm. It does not provide financial product, credit or tax advice. You can read more on the insights blog.
General information only, not personal financial advice. Speak with a licensed adviser before acting.