Why Property Prices Keep Rising, Even Without a Rate Cut
By Leigh Martinuzzi | Martinuzzi Property Group – eXp Australia
This week, the RBA met as widely predicted, and while some speculated we might see another interest rate drop, the cash rate was held steady at 3.85%. Personally, I think this was the right call. While underlying inflation has eased, now sitting at 2.4% and headline inflation at 2.1%, both comfortably within the RBA’s target range of 2-3%, a further cut might have overstimulated an already undersupplied housing market. With buyer demand still strong and stock levels historically low, further stimulus could push prices higher, making housing even less affordable.
We are seeing a high level of buyer confidence across the Sunshine Coast. This is fuelled less by favourable borrowing conditions and more by a lack of available homes. Auction clearance rates, while not as relevant here in Queensland as in southern capitals, are still a great measure of sentiment. These rates have remained above 70% nationally for the past several weeks, which reflects strong buyer engagement.
Property prices have continued to rise, albeit at a slower pace. Across the combined capital cities, dwelling values lifted 0.6% over June, while nationally, prices rose by 1%. Brisbane saw a monthly increase of 0.7%, with annual growth now sitting at 7%. While I don’t have the exact figures for the Sunshine Coast, regional areas are generally outperforming their capital counterparts. I estimate growth locally to be somewhere between 7% and 10% year-on-year, depending on the suburb.
Interestingly, most of this price momentum is being driven by the more affordable segments of the market. Properties in the lower 25% quartile are seeing the strongest demand. Suburbs that offer relative affordability are now experiencing the highest level of competition, and it’s pushing prices upward. This trend reflects what we see daily at MPG, homes under the $1 million mark are attracting strong buyer interest, but that interest is cautious. Buyers are willing to act, but only if the property presents real value. Presentation matters more than ever, particularly in the upper quartiles where buyer activity is slightly more subdued.
On the listings front, we did see an increase in new properties coming to market in May, with 35,069 new listings recorded nationally over the four weeks to June 1st. That’s up 11.1% from the April lull, which was affected by long weekends and tariff uncertainty. However, it’s still 7% lower than this time last year and 1.9% below the five-year average. Even with this small rebound, total listings remain exceptionally low, with only 133,725 properties advertised nationally, the lowest for this time of year since 2007. Here on the Sunshine Coast, many buyers are voicing frustration about the lack of choice, and when a good property does hit the market, it tends to attract immediate and competitive interest.
Asking prices from sellers are also revealing. Nationally, we’ve seen a 9.7% annual increase in vendor asking prices, higher than the official increase in median dwelling prices. This suggests sellers remain confident and see continued demand, which in many ways justifies their optimism.
There’s also been quite a bit of attention on the rental market. Rents are holding steady for now, but further increases are anticipated in the second half of the year. Unit rents in Canberra, Perth, Hobart, Adelaide, and Brisbane have all increased, with annual gains ranging from 3.2% to 8.9%. Melbourne rents have held steady, while Sydney saw a slight annual drop of 0.7%. With investor activity subdued due to shifting tax policies and affordability issues, more would-be homeowners are being pushed into the rental market, adding extra pressure to already tight vacancy rates.
A stat from the latest Matusik report that stood out to me: there are roughly 9.7 million dwellings in Australia, with only 2 million held by investors. That means 78% of dwellings are owned by non-investors, which helps explain the continued demand from everyday buyers and renters alike.
Looking forward, all eyes will be on the RBA. While they held steady this week, there’s still speculation that further cuts may be announced before year’s end. If inflation continues to ease and the economy shows more signs of softening, we may see one or two more cuts to stimulate growth. If that happens, I expect buyer demand to intensify further, especially in our most affordable local markets.
For now, if you’re looking to buy, be prepared and ready to act. If you’re considering selling, there are motivated buyers out there, particularly for homes under the $1 million mark. At MPG, we’re seeing firsthand just how powerful good presentation and the right marketing strategy can be. Let us know if you’d like to chat more about what this all means for your next move.
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