The Prime Minister, Anthony Albanese, will soon call the Federal Election. With Labor’s Budget released and Peter Dutton’s Budget in-reply forthcoming, politics will play a big role in the property and lending market for the rest of 2025. With the recent RBA Cash Rate reduction by 0.25 basis points, most lenders have since adjust their interest rates, with the full cut passed on to new and existing variable home loan products. The fixed rate market looks less appealing by the day, although fixed rates are decently priced and can still provide comfort to those seeking a little more security with their budget.
It seems as though at a minimum, rates have stabilised. More positively, recent unemployment and inflation data suggest that more Cash Rate reductions may be on our hands sooner rather than later. 3 of the Big 4 Banks are predicting a further 0.75 basis points slashed off the Cash Rate by the end of 2025. This development will provide a more favourable environment for potential homebuyers seeking additional borrowing capacity to enter the market, and for homeowners to obtain a better deal than the current market can provide them with.
PropTrack’s Home Price Index for February 2025 listed positive monthly growth in all Capital Cities except for Hobart. Adelaide, Sydney, Brisbane and Darwin are still considered to be at peak. Expect residential property price growth to continue, with housing demand still outpacing supply, and an easing interest rate market attracting more homebuyers with greater purchase capacity.
Rental demand is persistently growing rental prices, making property investment extremely attractive for those in position to capitalise on the market. For prospective buyers and investors, ‘time in market’ with vast gains in equity is certainly proving to be more beneficial than those looking to capitalise on ‘timing the market’ with a purchase at a low price.
The outlook for the home loan market appears stable, but it is influenced by ongoing economic recovery, demographic changes, and potential shifts in government policy. Staying informed about these dynamics is crucial for anyone active in the property market. We appreciate the opportunity to help you stay informed and in-tune with your options moving through a changing landscape for lending. Please feel free to pass on any questions, simple or complex and we’ll chat you through your lending and property options.
