Rate Cut Euphoria Could Be Premature Recent optimism about interest rate cuts may be misplaced, according to ASX Trader. Drawing parallels to past financial crises, rate cuts often came not at the start of economic recovery but as reactive measures to deeper problems already underway. The dot-com crash (2001) and Global Financial Crisis (2008) were both preceded by rate cuts—a pattern that suggests markets should be cautious.
Rather than being a sign of confidence, these late-stage cuts often indicate economic stress. With inflation potentially set to resurge and Australia’s 10-year bond yields breaking a 40-year trend, Rodney McLoughlin advises borrowers to plan conservatively. Australians buying now should budget for potential mortgage rates of 7-8%, not the recent lows.
Rental Prices Surge in Sydney Suburbs Sydney’s rental market remains under pressure as tenants continue facing year-over-year price hikes in key suburbs. According to PropTrack data:
- Wheeler Heights: +34.6% (House)
- Clovelly: +32.8% (House)
- North Turramurra: +30.4% (House)
These increases are being driven by an entrenched imbalance between supply and demand. While some areas like Lake Illawarra (-22.2%) and Suffolk Park (-16.4%) have seen rental price drops, they are rare exceptions.
REA economist Eleanor Creagh notes rental price growth is slowing slightly but remains elevated. Tenants are opting for smaller or more central homes, prioritizing affordability over space—a trend Rodney McLoughlin has observed in buyer and tenant behaviour alike.
Migration and Supply: A Widening Gap Australia’s migration surge continues to outpace housing construction. New ABS figures revealed over 110,000 new arrivals in Q1 2025, or around 500,000 annually. Migration now accounts for 75% of national population growth, raising concerns over infrastructure strain and housing access.
The Housing Industry Association (HIA) warns that only 986,000 homes are expected to be delivered by 2029, falling far short of the 1.2 million home target. Rodney McLoughlin points out that without structural reform—land release, planning speed, and tax burden—this shortfall will continue driving prices up.
Why Prices Outpace Rents Research by the e61 Institute suggests housing prices have outpaced rents for years, especially in inner-city areas like Sydney and Melbourne. The findings challenge the idea that supply constraints alone are responsible. Instead, speculative buying and the pursuit of capital gains are playing a stronger role.
While boosting supply remains crucial, tax reform around property profits may be the long-term lever needed to rebalance the housing market. Rodney McLoughlin notes that a cultural shift may be required, away from treating property primarily as a wealth engine.
Real Estate Newsletter
This article is a curated summary of various news stories from the past week, offering insights and updates on the real estate market. 26 September 2025.
Rodney McLoughlin is a trusted real estate professional with deep insights into the Australian property market. For personalized advice and market expertise, reach out to Rodney today.
