RBA rate cut fuels property market confidence as prices hit record highs
Property buyers could see a lift in confidence and borrowing capacity following the Reserve Bank of Australia’s 0.25 percentage point cash rate cut to 3.6% on Tuesday.
PropTrack data for July shows property prices are already at record highs, with Sydney’s median currently $1.19 million – up 4.9% over the past year. That momentum is now expected to build, with further rate cuts likely to draw more buyers into an already competitive market.
REA Group senior economist Eleanor Creagh said lower interest rates would support housing demand and price growth as competition heats up ahead of the spring selling season.
“While affordability remains severely constrained, the underlying market pressure of persistent housing undersupply relative to population growth remains in place.”
As such, Ms Creagh said home prices were expected to continue rising in the months ahead, albeit at a more moderate pace than seen in previous easing cycles.
With up to three more rate cuts expected in 2025, buyers in a position to purchase soon may find opportunities to act before further property price growth.
About the author – Alex Veljancevski is a Sydney Mortgage Broker with Eventus Financial, which assists first home buyers, investors, upgraders and borrowers seeking to refinance to a better deal on their home loan.
