In a widely anticipated move, the Reserve Bank of Australia (RBA) cut the official cash rate by 0.25% to 4.10% today. This is the RBA's first rate reduction since November 2020, when it reduced the cash rate to 0.10% as part of its efforts to support the Australian economy during the COVID-19 pandemic. Homebuyers and investors will welcome the shift in monetary policy, which is expected to boost borrowing confidence and further strengthen Australia’s property market.
Industry NewsRBA Rate Cut Fuels Buyer Confidence
Next ArticleRBA Rate Cut Fuels Buyer Confidence
Author Harry Bongiorno
18 February 2025
Auction Market Strength Continues
Recent data highlights growing buyer demand, with auction success rates climbing steadily. Melbourne recorded a preliminary rate of 70.7% over the weekend, with Marshall White outperforming the broader market with a 76% auction success rate, reflecting strong demand for our premium listings. Nationally, capital city rates reached 71.2%, the highest since September 2024.
Lending Conditions Ease Amid Rate Cut
Despite elevated property prices, Australia’s dwelling finance market showed resilience in Q4 2024, with new finance approvals rising 1.4% quarter-on-quarter and 16% year-on-year. This was driven primarily by owner-occupiers, while investor lending dipped for the first time in nearly two years, particularly in Western Australia.
Adding to the positive momentum, Treasurer Jim Chalmers’ recent changes to lending rules are set to increase mortgage accessibility:
· HELP Debt Adjustments: Student loans nearing repayment will no longer affect mortgage serviceability.
· Higher Borrowing Capacity: A $125,000 income earner could now borrow $95,900 more, while a $75,000 income earner may access an additional $26,800.
· Boost to Housing Supply: APRA’s relaxed pre-sale rules for construction finance will help smaller developers secure funding, potentially increasing new housing stock.
Market Outlook
With rising buyer sentiment, improving borrowing conditions, and a renewed focus on housing supply, today’s rate cut is likely to further support market activity into 2025.
Ready to take advantage of the opportunities today’s rate cut brings?
Access expert advice on how today’s decision can benefit your property goals and borrowing capacity. Speak with the Marshall White Finance team for tailored mortgage and finance solutions.
*Image source: Project First Light
