Australia is Punishing Homeowners for an Energy Problem

How does increasing your mortgage repayments bring down the price of petrol?

This is the question Australians should be asking as inflation hits 4.3 per cent and another interest rate rise enters the conversation. 

Families are already paying more to fill the car and keep the lights on. Now they could be asked to pay more on their home loan as well.

But what would another rate rise actually achieve?

Can higher interest rates really fix energy-driven inflation?

Transport costs rose 8.7 per cent over the past year, driven by higher global oil prices. 

Meanwhile, some housing pressures are easing. The rising costs of building new homes in the 12 months to August 2026 has slowed from 5.4 per cent to 4.7 per cent in 12 months to September 2026. That doesn’t mean homes are getting cheaper; it means price rises are slowing.

Electricity prices jumped 12.8 per cent, largely because government rebates ended. 

Increasing mortgage repayments will not bring those rebates back, just as it will not produce more oil or put extra electricity into the grid.

Higher rates can make people spend less. They can force a family to cancel a holiday, put off buying a car or stop eating out, but that family still needs to drive to work and switch the lights on.

We risk squeezing households harder without fixing the costs driving their bills higher.

If I were sitting at the Reserve Bank’s table, I would be asking why households should take another hit before we have established what another rate rise will achieve. 

I would hold rates for now and watch whether higher energy costs are spreading into broader price rises.

Why is the government leaving households to pay the price?

And if I were in government, I would stop leaving the Reserve Bank to do the heavy lifting while families carry the cost. Raising rates is not the only choice available.

The government needs to show some backbone. Put reliable, affordable energy ahead of political point scoring. 

Get viable projects built, remove duplicated approvals and fix the delays holding up electricity connections. Set public deadlines, name who is responsible and explain every missed target.

Australians do not need another announcement about what might happen years from now. 

They need a government prepared to make difficult decisions and be accountable for delivering them. 

None of this makes global oil cheaper overnight, but neither does making a family’s mortgage more expensive.

Enough is enough. It is weak leadership to keep asking households to tighten their belts while accepting excuses for slow delivery. 

Families are making hard choices every week. It is time the government showed the same urgency.

Best and worst sectors

Materials is the best-performing sector so far this week, rising 4.97 per cent, supported by recovering copper prices and hopes of fresh Chinese stimulus.

Real Estate gained 3.41 per cent, as gains in Goodman Group and retail property trusts helped lift the sector.

Information Technology rounded out the top 3, up 2.66 per cent, as renewed AI enthusiasm and a strong NEXTDC rebound boosted technology shares.

At the other end of the market, Consumer Discretionary is the worst sector so far this week. 

It fell 4.95 per cent as higher inflation and renewed rate-rise fears raised concerns that households will cut back on non-essential spending.

Consumer Staples was the second-worst sector, dropping 4.21 per cent as profit-taking after recent gains, followed by weakness in Coles, Woolworths and Metcash, dragged the sector lower.

Communication Services rounded out the worst performers this week, falling 1.46 per cent, as rate-rise fears may have reduced demand for dividend-paying stocks. 

It’s possible that investors are reassessing their yields against cash and bonds.

Best and worst stocks

Lynas Rare Earths led the ASX Top 100 this week, climbing more than 21 per cent as buyers returned after heavy selling. Its update this week is showing stronger revenue and record average selling prices.

Greatland Resources Limited followed, rising over 15 per cent. Its rise appears part of the broader rebound in gold miners.

Paladin Energy rounded out the leading performers, gaining over 14 per cent as improving uranium prices provided a supportive backdrop.

At the other end, Wesfarmers Ltd was the weakest performer, falling more than 7 per cent as slowing Bunnings sales growth and renewed rate-rise fears heightened concerns about consumer spending.

JB Hi-Fi followed, falling over 6 per cent due to falling Australian sales with weaker comparable sales reinforcing concerns that households are cutting discretionary purchases.

Woolworths Group Limited rounded out the worst performers, falling more than 5 per cent despite stronger supermarket sales. 

Warnings of a tougher Christmas trading period and declining Big W sales highlighted the continued pressure on household spending.

All Ordinaries Index update

The All Ordinaries Index is on track for its strongest week in four months, up 1.2 per cent as of Thursday’s close. 

Materials led the charge with a sharp rebound, supported by strength in information technology, while financials held slightly positive.

That’s pushed the market back above the key 9,000-point level. The question now is, can it stay there?

If buyers maintain control, 9,200 is the next level to watch. 

But a sharp sell-off next week would raise the risk that this is simply a dead cat bounce, putting a fall towards 8,600 back on the table.

There’s certainly no shortage of potential triggers, with the RBA’s interest rate decision.

US midterm elections and earnings from the biggest AI companies are all approaching. 

One possibility is that investors have already priced in another rate rise and are looking beyond it, betting it could be the last for a while.

But rather than getting caught up in predicting the headlines, watch how the market responds. 

For now, the price action is looking more positive. Buyers have stepped in, the market has reclaimed 9,000, and momentum has improved. 

The next test is whether buyers can defend that level and build on this week’s gains.

It’s too early to declare the danger is over, but after months of uncertainty, this is a welcome step in the right direction.

Good luck and good trading.

Dale Gillham is the Chief Analyst at Wealth Within and the international bestselling author of How to Beat the Managed Funds by 20%. 

He is also the author of the award-winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good bookstores.