Rates are at a 15-year high but commercial investors aren't flinching
Helen Tarrant, founder of Unikorn Commercial Property, examines why stronger rental yields and net leases can help well-selected commercial assets absorb higher borrowing costs, while residential investors face mounting cash-flow pressure.
Tenant strength, lease terms and rent-review provisions can help determine whether a commercial property continues to generate surplus income as borrowing costs rise. (Image source: Anatoliy Cherkas/Shutterstock.com)
At a 4.60 per cent cash rate, a typical leveraged residential investment property is losing money every week. A well-bought commercial property can absorb mortgage rates above 9 per cent before it costs its owner a dollar. That gap explains more about investing in 2026 than almost anything else.
On 29 September, the Reserve Bank lifted the cash rate
to 4.60 per cent. It was the fourth hike of the year and took the cash rate to its highest level s…
