Property prices & interest rates: What to expect

Property prices & interest rates: What to expect

Early this year, home buyers were flocking to ‘get ahead of the game’ with anticipated interest rate cuts on the horizon. However, more recent data raises some uncertainty about just how far off relief for borrowers may still be.

Back in January 2024, there was great interest in the expected window of opportunity for property buyers to benefit from interest rate cuts, anticipated to occur by the end of the year, before the property market became too crowded. This is because, generally speaking, when interest rates are cut the property market will rise. However, recently these interest rate cut expectations have become less likely, due to ongoing inflation issues, low unemployment, a strong economy, and the upcoming stage 3 tax cuts.

The Reserve Bank of Australia (RBA) has already recently warned there is a possibility for rates to rise again before falling, as it was yet to be convinced that inflation was on a sustainable path back down towards its target levels.

Moreover, with relief for taxpayers on the way through tax cuts, property buyer confidence is already expected to be on the rise in lieu of interest rate cuts. As a result, the RBA has noted a reduced need to kickstart spending and borrowing just yet. This now means that vendors anticipating falling rates might need to adjust their strategies as the RBA is likely to keep rates on hold for a longer period.

Individuals with debt can still expect to find relief, but the pace and extent of any interest rate adjustments will depend on broader economic conditions and has become much less predictable. It’s important to stay informed and up-to-date before making any big decisions. If you are unsure of how these potential interest rate changes may affect you or your business, or want to discuss opportunities to capitalise while remaining vigilant, our team of experts are here to help you. We understand the dynamic nature of the current Australian economy, and the importance of applying adaptability to changing circumstances.