RBA Rate Cut: What It Means for the Property Market

By Leigh Martinuzzi with MPG – eXp Realty 

After months of speculation and mounting pressure, the Reserve Bank of Australia (RBA) has finally delivered some relief to homeowners and buyers, announcing a 0.25% cut to the cash rate. This brings the rate down to 4.10%, marking the first reduction since May 2022. While it’s not a massive drop, it signals a potential turning point for the market as we move further into 2025.

This decision follows easing inflation figures and slower-than-expected economic growth. Household spending remains under pressure, and consumer confidence is still fragile. The rate cut is designed to stimulate borrowing capacity and reinvigorate buyer activity. However, lower job growth and rising unemployment were likely the primary triggers for this move, with unemployment forecast to increase to 4.5% by mid-2025.

So, what does this mean for the property market here on the Sunshine Coast and across the country?

Capital City Markets: Still a Mixed Bag

Nationally, property values have been showing signs of stabilising after a softer end to 2024. CoreLogic data highlights that national home values declined by -0.3% over the past three months. Capital city markets led the decline, with Sydney and Melbourne both under pressure. Sydney was down -0.3% last month, although it remains up 1.2% over the past 12 months. Melbourne continues to struggle, dipping -3.6% year-on-year.

However, Brisbane, Perth, and Adelaide remain standout performers, with Brisbane recording a 0.3% increase over the quarter and an impressive 9.9% rise over the past year. These cities continue to benefit from relative affordability compared to Sydney and Melbourne, alongside continued population growth.

Interestingly, while price growth is slowing, auction clearance rates in Sydney and Melbourne have shown an upward trend in recent weeks. This may suggest sellers are eager to secure sales before further cooling takes hold.

Regional Resilience

Regional markets have again demonstrated their strength. CoreLogic’s latest report revealed that regional property values increased by 0.7% over the past three months. While this is a slower pace than the boom we saw during the pandemic-driven sea and tree change, it highlights that demand for lifestyle regions – like the Sunshine Coast – remains robust.

Buyers are still drawn to the Sunshine Coast’s blend of lifestyle and long-term investment appeal. Properties in premium locations or those priced right are still moving. While buyers have become more selective, demand for quality homes is holding firm.

Supply Remains Tight

One of the key factors keeping values stable, particularly in regional markets, is the ongoing supply shortage. While some capital cities have seen listing volumes rise, lifestyle markets like the Sunshine Coast continue to struggle with a lack of supply. We’re simply not building enough homes to match demand, and this underpins price stability.

The RBA rate cut could encourage more buyers into the market, but unless supply improves, we could see renewed upward pressure on prices as we move into the traditionally busy autumn selling season. Recent data shows the average home loan on the Sunshine Coast is now $635,000, up from $609,000 just three months ago. If lenders pass on the full rate cut, homeowners could save roughly $100 per month on repayments.

What to Expect Moving Forward

While this rate cut is a welcome relief, it’s likely to be the first of a few in 2025. Many economists anticipate further cuts later this year, depending on inflation data and economic performance. For homeowners and buyers, this is a reminder that while rates shift, the core drivers of property success remain: supply, demand, and location.

For sellers: The current market still offers strong opportunities, especially in sought-after areas like the Sunshine Coast. Well-presented and appropriately priced properties continue to attract buyer interest. We’ve also put together a free guide for those considering selling – The Future of Home Selling on The Sunshine Coast.

For buyers: This rate cut may boost your borrowing capacity slightly, so it’s worth checking with your lender. However, competition for quality properties remains strong, so acting quickly when the right opportunity arises is key. The Sunshine Coast Home Sellers & Buyers Guide. 

Final Thoughts

The RBA’s rate cut is a positive step, but it’s not a magic fix. Our local market on the Sunshine Coast remains resilient, driven by lifestyle appeal and supply constraints. Whether you’re buying, selling, or weighing up your options, staying informed is essential. Connect with us here – Digital Business Card – Facebook – Instagram – YouTube