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Following the third Reserve Bank of Australia rate cut, a property expert forecasts an increase in buyer and seller confidence ahead of the spring selling season.
LJ Hooker Group head of research, Mathew Tiller, said the cut brought significant relief to the market, particularly for first-time buyers and those looking to upgrade.
With inflation now at its lowest since 2021, the RBA’s announcement increased buyers’ borrowing capacity and opened more opportunities for average single and dual income earners.
According to Domain and Finder, the new rates boost borrowing power by $4,000 for a $50,000 single earner and $49,000 for a $400,000 dual-income household, allowing them to afford homes up to $570,000 and $1.167 million, respectively.
Despite the multiple rate cuts, property prices continue to increase, up by 6.4 per cent to date, following tight supply and strong demand.
“This is putting additional pressure on those looking to enter the market or considering a move,” Tiller said.
“Affordability is challenging, so any rate cut will help to build confidence, especially at a time when we expect to see stock levels start to increase and a high level of activity.”
Tiller said that the back half of 2025 shapes up as a seller’s market, with listings down around 11 per cent from the same time last year and 6.3 per cent lower than the 10-year average.
“The rate cut will bring more certainty to buyers and reassure those looking to list, prompting some to act sooner as improved borrowing capacity is likely to increase demand,” he said.
Auction clearance rates have held at around 70 per cent over the past few weeks, but become a more attractive strategy heading into spring.
“Going to market in spring is more than just about gardens in bloom or better presentation; buyers start to get more serious and motivated from September, and that is a big incentive for sellers.
“We can see from the clearance rates that people are out there buying property over winter.”
According to Tiller, Australians’ borrowing power will continue to increase this year, with an anticipated rate cut in November before two more in the new year will keep up the momentum during the next 12 months.
He said that with inflation under control, job markets softening and global growth slowing, interest rates have been forecast to fall below 3 per cent in early 2026.
Tiller identified Brisbane, Perth and Adelaide as markets to watch, with low stock and strong demand keeping prices moving.
“It is not just in Sydney and Melbourne, we expect to see auction activity picking up in other capital cities too,” he concluded.
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