As we all know now, the Reserve Bank confirmed what most of us had been anticipating when they announced the first reduction in Australia’s official interest rates since 2020. This move had been tipped by most economists, so it came as no surprise.
What many readers may not have realised is that the property market had clearly already anticipated this move. Buyer activity has been noticeably elevated since the start of the new year, resulting in increased sale prices across many campaigns. Whilst this is not uncommon at this time of year due to an annual influx of new buyers hoping to take their next step in their property journey, we are anticipating that the positive mindset among many Victorians will continue in response to the move by the RBA, along with the anticipation that there are more interest rate cuts to follow.
Many of our readers will be looking at the year ahead and wondering what to expect. With this in mind, here’s a few pointers we’ve gathered recently.
Data from mortgage comparison site, Canstar, suggests that there are over half a million Australian households that have never experienced an interest rate cut. So for those who may be wondering, the reduction of 0.25 per cent will mean that payments on a $600,000 home loan will be reduced by an average of over $90 per month. That’s good news for the household budget, and good news for homebuyers as it will mean an increase in borrowing ability.
Importantly, economists are forecasting more cuts to come. For example, the NAB have forecast that interest rates will be a full 1.0 per cent lower by this time next year, which will mean a far more substantial change in people’s property plans.
If these cuts eventuate, the analysts at Corelogic have said that their modelling indicates that a cut of 1.0 per cent to official interest rates could result in an increase in median property prices across Australia of over 6.0 per cent, including a price hike of over 9.0 per cent in Melbourne.
Whilst any form of price forecasting is notoriously unreliable, numbers like these should give everyone with plans to buy or sell in 2025 further food for thought. Given the likelihood of increased positivity among buyers in the months ahead, the outlook is certainly looking positive.
Of course, as is always the case, our team at Ian Reid Buyer and Vendor Advocates are ready and able to provide up-to-date advice and assistance, so don’t hesitate to give us a call on 9430 0000.
Best wishes,
Ben Reid
02/18/2025 
