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According to property experts, the RBA’s decision to hold the cash rate will steady buyer confidence, sustain demand and price growth, while keeping sellers active ahead of a likely November cut.
The Reserve Bank of Australia (RBA) made the decision to hold the cash rate at 3.6 per cent, in line with market expectations, with economists and major banks predicting the next cut to happen in November.
Experts noted that each rate cut seen this year has been followed by a hold, with the trend continuing at the most recent meeting’s decision to hold following the August cut of 25 bps.
The RBA said that, although inflation may have been within the target range of 2–3 per cent in the June quarter, recent data suggested it may have risen higher than anticipated.
Additionally, the RBA said that growth in employment had slowed slightly more than expected, while the unemployment rate had held firm at 4.2 per cent in August.
LJ Hooker’s head of research, economics and business intelligence, Mathew Tiller, said that buyer confidence was still buoyed following the August reduction, as auction clearance rates remained at around 70 per cent.
“The spring market is in good standing because we have seen enquiry levels and sentiment continue to rise with each of the three cuts given by the RBA this year,” Tiller said.
“From an economic point of view, employment remains quite steady, and that underscores the strength of buyer demand.
“Listings are slowly increasing, but it is starting from a low base, and as a result, we continue to see price growth in most capital cities.”
Tiller stated that appraisal numbers were above average, suggesting a potential spike in listing volumes over the coming months.
“It is a good idea to sell before Christmas and take advantage of what is currently a seller’s market,” Tiller said.
“Some home owners are trying to hold out for the next rate cut as it will increase buyer budgets, but now could be a good time to sell before everyone jumps in.”
Similarly, The Agency’s CEO of real estate, Matt Lahood, has been expecting the market to move fast before the end of the year.
“When business resumes to normal after a period of public holidays and school holidays nationally, and with only 70 selling days until Christmas, there will be a strong appetite from those seeking to secure a home or investment before the year is out,” Lahood said.
Cotality research director Tim Lawless said that the RBA had chosen the cautious path, and is likely to wait for a full inflation update before making the decision regarding another potential cut in November.
“At this meeting, the board will have the benefit of the September quarter CPI data, which will be central to their decision-making,” Lawless said.
“A further cut to interest rates is likely to provide additional support to housing demand from an increased borrowing capacity and serviceability assessments, but also via higher consumer sentiment.”
He said that the number of homes available for sale in September was hovering around record lows, with advertised supply down almost 20 per cent from the previous five-year average.
Additionally, Lawless said that housing demand remains strong, as estimates show home sales volumes tracking 2.7 per cent higher than a year ago and 4.2 per cent above the previous five-year average.
Money.com.au finance expert, Sean Callery, said that home owners hoping for a rate cut this year may be left disappointed.
“There’s still hope for a rate cut in November, but that will hinge on the labour force and quarterly inflation data due in October,” Callery said.
“Unless we see a meaningful slowdown in inflation over the next quarter or an uptick in unemployment, the growing consensus is that the RBA will keep rates on hold for the rest of the year.”
Callery said that their research had found that mortgage holders were divided on how the RBA has handled the rate cuts in 2025.
“Many households feel the cost of living hasn’t eased enough to justify optimism or further rate cuts, while others see steady progress and believe the Reserve Bank is on the right track and that holding rates is warranted,” Callery concluded.
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