With the Reserve Bank tipped to cut interest rates again this month, a new wave of property market momentum may be just around the corner. Analysts suggest that even a 1% drop in the cash rate could boost borrowing power by over $100,000 for dual-income households earning $200,000 annually.
This comes after February’s surprise rate cut — the first in over four years — which sparked a noticeable uptick in buyer confidence and property values across Sydney, Brisbane, Perth, and Adelaide. Rodney McLoughlin notes that these traditionally resilient markets could see a fresh surge in activity as borrowing capacity expands further.
The Catch: Deposits Still a Major Barrier
Despite the boost in borrowing power, rising property values continue to make deposit saving the main hurdle for first-home buyers. When prices outpace wage growth, aspiring buyers are left chasing a moving target. However, Rodney McLoughlin reminds buyers that low-deposit schemes, such as the First Home Guarantee, may help bridge that gap — especially for those ready to act now.
With two-bedroom units in the $500,000s still available in some markets, the window for affordable entry is narrowing. Experts warn that waiting too long could result in being priced out.
Buyers Urged to Act Before Demand Surges
Anticipated rate cuts are likely to trigger a FOMO-driven wave of buyer competition. Compare the Market data shows that in Queensland, buyers could save up to $729 per month on mortgages in premium suburbs like New Farm if the cash rate falls by 0.5%. In NSW, the average borrower could gain $45,000 in buying power and save up to $5,000 annually in repayments.
While the short-term outlook is promising, McLoughlin emphasizes the need for buyers to stay grounded. He encourages clients to stress test their finances, shop around for competitive rates, and work with experienced brokers to navigate their options.
Long-Term Perspective Still Matters
Even with rate relief, affordability will remain a defining issue. Housing supply shortages persist, and many experts believe that additional rate cuts could reignite price inflation if demand outpaces new construction.
Ultimately, McLoughlin advises that the best time to buy is when you’re financially prepared — not just when the market seems hot. Strategic timing is nearly impossible, but preparation, education, and a solid plan are what truly set buyers up for success.
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. 23 May 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.
