Brett Warren , National Director – Metropole Group
If you’ve been waiting for a clear signal in the property market – this might be it.
Australia’s latest inflation figures are giving rise to cautious optimism, particularly among would-be homebuyers and seasoned investors. With the Consumer Price Index (CPI) easing to 2.1% in the 12 months to May 2025 – its lowest level since late 2024 – the conversation is swiftly shifting to when, not if, the Reserve Bank will cut interest rates.
This potential pivot is no small thing – especially with the RBA meeting next week. Interest rates have played a starring role in shaping property market sentiment over the past two years. As borrowing costs surged, so did repayment burdens, sidelining many would-be buyers. Now, as inflation retreats, the Reserve Bank may soon have the runway to reduce the cash rate again, offering a welcome reprieve to households.
For homebuyers, that could translate to improved borrowing capacity and lower monthly repayments – critical factors in bridging the gap between aspiration and affordability. The chance to lock in a home loan at more favourable rates could spark a resurgence in first-home buyer activity, especially in markets where price growth has moderated.
For property investors, the outlook is brightening. Annual rent growth remains strong at 4.5%, delivering healthy yields, while new dwelling prices have steadied – creating a rare moment where income potential is solid and entry costs are more predictable. With financing conditions potentially set to improve, this environment offers savvy investors a golden opportunity to expand their portfolios with confidence before the next upswing
Add to the mix falling fuel and electricity prices, and we’re looking at a broader easing of cost-of-living pressures, which is a welcome boost to consumer confidence that should ripple through to housing demand.
The bottom line? While nothing’s set in stone yet, market momentum tends to favour the prepared. For those ready to make a move, now’s the time to watch the Reserve Bank’s next move – and be ready to act.
