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The RBA cash rate is currently 4.35% as at May 2026, after rising again in early 2026 following a brief easing cycle. Rates did not fall as quickly or as far as many investors had hoped. NAB's chief economist has expressed greater conviction that the next move is down, but the timing remains uncertain, with the cashrate forecast to reach 3.6% by the end of 2027.
For the standard residential investor carrying debt, higher rates bite. They increase holding costs, push net yield down further, and squeeze cash flow on negatively geared properties. The pain is real for any one holding a low-yielding asset with a loan against it.
At 8.5% and above net yield, the spread between yield and debt cost stays strongly positive even at current rates. The asset is positively geared from day one, so a ratethat would distress a 2.5% residential property leaves a co-living asset comfortably cash flow positive.
For investors who prefer a fixed return, Vault offers 15% per annum, well above the current cash rate. Vault commits your capital for a two-year term, so it trade sliquidity for certainty. For the right investor, that margin makes it attractive relative to nearly every other fixed-return option available today.
Rate cycles reward the investors who built in margin from the start. Low-yield assets become distressed when rates climb. High-yield assets stay cash flow positive throughout. The rate environment does not change the strategy so much as it exposes which strategy was sound to begin with.
Where to from here. If you want to understand how a positively gearedposition might sit alongside your current portfolio, we are happy to talk it through.
Rates and forecasts are current as at May 2026 and will change. Vault is a fixed-return product that commits capital for a two-year term and carries risk like any investment. This is general information only, not financial or investment advice, and is not an offer of a financial product. Seek your own advice before investing.
