MARKET WHIP

Tariff-triggered cuts to interest rates could be just around the corner, with Australian borrowers the likely winners if they come to fruition.

US trade policies have hit media headlines this month following Donald Trump’s controversial tariff announcements on 2 April.

The flow of tariff announcements coming out of the US has rattled share markets globally, driven by uncertainty plus fears of an economic slowdown in the US.

However, there may be a silver lining to the tariff cloud for Australian home owners. All four of Australia’s major banks are predicting solid cuts to interest rates – and they could come sooner rather than later.

Here’s what the big banks are saying could happen.

The cash rate could fall to 3.35%

NAB believes the Reserve Bank of Australia (RBA) is likely to act quickly, with a 0.5% rate cut in May, followed by 0.25% cuts in July, August, November and even February 2026.

Over at ANZ, the forecast is for the RBA to cut the cash rate by 0.25% in May, followed by 0.25% cuts at its July and August meetings. That could see the cash rate drop to 3.35% by August, down from 4.1% at present. 

Meanwhile, the experts at Westpac expect three more 0.25% rate cuts this year.

And the CommBank view is that the RBA will likely cut rates by 0.75% in total by year’s end, adding that “a rate cut in May is a done deal” depending on inflation figures.

No guarantees

Given the fast-moving tariff situation, it’s no surprise all four big banks have highlighted that their rate forecasts are not set in stone. And of course, it’s the RBA that calls the shots on the cash rate.

On that front, the RBA isn’t giving much away. In its latest (April 15) Board meeting, the RBA kept rates on hold, saying it wanted to wait and see how US trade policies could impact the Aussie economy, job market and its arch-enemy – inflation. We won’t know how inflation is tracking until 30 April when the latest figures come out – about a fortnight before the RBA meets again on 19-20 May.

Long story short, it’s a case of ‘watch this space’ – for a few weeks at least.

Building costs could rise

A downside of US tariffs is a possible impact on new home building costs. If Australia ends up facing higher prices for materials used in construction, we could see price increases for new home builds and renovations. So it’s worth speaking to us about your borrowing power if you’re planning a big construction project in the near future.

Could you make a rate cut of your own?

If the major banks are right, we could see rates start to fall as soon as next month. But home owners may be able to enjoy a rate cut of their own even earlier. Plenty of lenders are offering home loan rates that start with a 5. That provides lots of potential for you to save by switching to a new loan. It could also be an opportunity to enjoy improved loan features.

Contact us today to see how your home loan shapes up.

Did you know that the average home owner saw their property’s value rise $46,000 per year over the past five years? Today we’ll look at ways you could put that recent increase in equity to further use.

The five years since 2020 have seen plenty of action.

From the pandemic (let’s not go there again), through to a change in government, and some notably wild weather events around the country, there’s been no shortage of highs and lows.

Chances are, you’ve seen a few changes of your own. Maybe a new career or the arrival of a new family member.

Through it all, your home’s value has likely been steadily rising in the background.

Gains of 39% in five years

The latest data from CoreLogic shows home values nationally have surged 39.1% over the past five years to a median value of $820,331.

Translated to hard coin, that means an extra $230,000 has been added to the median home value.

But here’s the thing.

While a 39% gain is impressive, it’s actually pretty modest compared to the percentage gains of earlier periods.

In Sydney, for instance, home prices grew 78% in the years between 1998 and 2003.

In Melbourne, home values jumped 79.5% in the early 2000s.

Meanwhile, cities such as Brisbane, Adelaide, Perth, Hobart and Canberra experienced their largest five-year gains through the mid-2000s, with values across these markets roughly doubling over the period.

What’s different this time around is that home values are higher than in the past.

That means while the latest increase has been “mild in percentage terms”, according to CoreLogic, the $230,000 average dollar value of current price gains “far outperforms historic peaks”.

For example, by comparison, the dollar rise seen over the five-year 80% national increase to December 2003 was roughly $90,000 less, at $140,000.

Putting equity to work

An increase in your home’s value can be worth more than bragging rights at your next BBQ.

It could be that you have considerable home equity. That’s the difference between your home’s market value and the balance remaining on your home loan.

Home equity is more than just a number. It can also be a valuable resource.

It may be possible, for example, to put home equity to work to achieve personal goals – anything from completing renovations, buying an investment property, refinancing to a lower interest rate, or just taking a well-deserved family holiday.

To find out how to tap into your property’s equity, get in touch with us today and we’ll run you through the numbers.

If you’re in the market for a first home, there’s one scheme you should know about. It’s called the Home Guarantee Scheme, and it could slash the time it takes to buy a place of your own by several years. Here’s how it works.

Saving that all-important 20% deposit for a first home isn’t easy – especially given the current cost of living crunch.

In fact, the average time taken to pull together a first home deposit has now hit 10.6 years, according to CoreLogic.

But with the Home Guarantee Scheme (HGS), you may be able to buy with just a 5% deposit – without paying lenders mortgage insurance.

No wonder 193,000 first home buyers have used the HGS to get into the market since it launched in 2020.

How the Home Guarantee Scheme works

Instead of giving first home buyers a cash payment, which is (essentially) the case with the First Home Owner Grant, the HGS sees the federal government guarantee your home loan.

This can benefit first-home buyers in two ways.

First, under the HGS, lenders can let you take out a home loan with just a 5% deposit. Of course, some banks already offer this.

But if you have a deposit below 20%, you’ll usually be asked to pay lenders mortgage insurance (LMI), and that can cost many thousands of dollars.

That’s where the second upside of the HGS comes in.

Buyers using the scheme aren’t slugged with LMI, as the government acts as guarantor for your mortgage instead.

Three HGS options

The HGS is pitched at three types of buyers:

1. First Home Guarantee

The First Home Guarantee aims to help eligible first home buyers get a place of their own sooner.

In the current financial year, a total of 35,000 places are available.

2. Regional First Home Buyer Guarantee

If you’re planning to buy a first home in a regional area, the Regional First Home Buyer Guarantee could match your needs.

Only 10,000 places are up for grabs in the scheme this financial year, so reach out sooner rather than later if you’d like to explore this option.

3. The Family Home Guarantee

If you’re a single parent, the Family Home Guarantee is even more generous.

It allows eligible applicants (you don’t have to be a first home buyer) to purchase a home with as little as a 2% deposit without paying LMI.

The catch is that only 5,000 places have been made available for the 2024-25 financial year.

Why more first-home buyers are using the 5% deposit scheme

Just five years ago, around one in 10 first home buyers turned to the HGS for help buying a first home.

Today that figure is closer to one in three.

And it’s not just about rising property prices, higher interest rates or cost of living pressures.

The First Home Guarantee and the Regional First Home Buyer Guarantee have been expanded to include friends, siblings and other family members buying together, along with non-first-home buyers who haven’t owned a property in Australia in the past 10 years.

The fine print

The 5% first home buyer deposit scheme does have a few strings attached.

You will need to meet eligibility conditions.

These chiefly relate to your income and the maximum price you plan to pay for your first home – property price caps also apply.

The other thing to be aware of is that not all lenders have signed up to the HGS, so your options can be a little more limited.

Talk to us to get the ball rolling

If you’re interested in fast-tracking your path to home ownership, the 5% deposit HGS could be the solution you’ve been looking for.

Talk to us to find out if you’re eligible for the Home Guarantee Scheme – and discover the lenders that can help you get across the line.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

The so-called market ‘downturn’ we saw over the last few months was a blink-and-you-miss-it affair. Home prices are once again on the up. We unpack what’s happening – and why now could be a good time to buy.

Jeepers. That didn’t last long.

Back in early January, CoreLogic declared Australia’s housing market had entered ​a downturn after property prices dropped -0.01% in November and -0.1% in December (followed by a -0.03% dip in January).

Fast forward to early March – just two months later – and CoreLogic reports “Housing downturn reverses in February”.

Have we just witnessed the shortest downturn on record? Or was it just a minor blip on the radar?

Here’s a closer look at what’s happening with home prices.

Lower rates have fuelled buyer confidence

When CoreLogic stated in January that “the growth phase of the (property) cycle has come to an end”, it had plenty of evidence to back up the claim.

Homes were taking longer to sell. Listings were up across the country, and buyer demand was stalling.

Events in February changed all this.

Expectations of a Reserve Bank of Australia (RBA) rate cut grew stronger, boosting buyer confidence.

Auction clearance rates improved, and the flow of freshly advertised ‘for sale’ listings slowed.

The much-anticipated 0.25% RBA rate cut, when it finally arrived, brought everything together to see home prices rise 0.3% in February, reversing the falls of the previous three months.

Will home prices keep rising?

According to REA Group, February’s rate cut not only lifted buyer sentiment, it also delivered an uptick in borrowing power and improved affordability.

And after a long period of higher rates, REA says buyers who held off purchasing are now re-entering the market.

Could this see home values continue to rise?

A lot hinges on interest rates.

The RBA has made it clear it’s in no great hurry to call further rate cuts, though that doesn’t mean it won’t happen.

NAB is predicting four more rate cuts over the next 12 months.

Westpac says rates could drop an additional 0.75% this year, and expects home prices to increase by 3% in 2025, and by 7% next year.

AMP says Australia’s “chronic shortage of homes” could see home prices jump 3% this year.

Why now could be a good time to buy

FOMO (fear of missing out) should never be the main motivator for buying a home. After all, it’s probably the biggest investment you’ll ever make.

But as the last few months have shown, market downturns can be done and dusted in a matter of weeks, and sitting on the sidelines waiting for prices to fall can just mean paying more down the track.

Call us to know if you’re home loan ready right now, and we’ll get the ball rolling on a loan that matches your needs and budget.

Good news for the three million Australians who have a student debt. New rules are on the cards that could soon increase their borrowing power when applying for a home loan.

Heading off to uni can be a great investment in your skills and qualifications, potentially leading to a higher income over the course of your career. The downside for many, though, is a lingering student debt. More than just a balance to be repaid, a HECS/HELP debt can impact your ability to buy a home. So, it’s great to hear that the federal government is pushing for lending rules to be loosened so that graduates have a better chance of getting started as home owners.

How a HECS/HELP debt can impact home-buying plans

Around 3 million Australians have an outstanding HECS/HELP balance. HECS/HELP debts work differently from other types of debt – the balance doesn’t attract interest but it is indexed (typically upwards) each year in line with (the lower of) inflation or wages growth. And unlike traditional debts, HECS/HELP repayments only kick in when graduates earn over $54,435 a year (2024-25 threshold), with a starting repayment rate of just 1% annually. Sounds good, right? Well, here’s the thing.

University fees went up in recent years. And so did the indexation rate. Both of which have pushed up the average HECS/HELP debt. This is hurting the borrowing power of many young university graduates who are trying to enter a property market that has also boomed in recent years. That’s because under responsible lending rules, banks currently take a home buyer’s HECS/HELP debt into account – in much the same way as an outstanding credit card balance or car loan – when deciding how much they’ll lend.

Fortunately, that looks set to change.

New calls to loosen lending rules for HECS holders

Federal Treasurer Jim Chalmers recently called on financial regulator Australian Prudential Regulation Authority (APRA) to update its guidance to banks to make it easier for people with a HECS/HELP debt to take out a home loan by removing HECS/HELP debts from debt-to-income reporting. Chalmers believes this would be a “commonsense” change, saying, “people with a HECS/HELP debt should be treated fairly when they want to buy a house and we’re working with the regulators to make sure they are.”

Meanwhile, the Australian Banking Association has said the potential to unlock more credit for prospective home buyers could assist them in realising the dream of home ownership. Long story short, the government and bank regulators, including both APRA and ASIC, appear to be in agreement on making these changes promptly. Of course, we’ll keep you in the loop with any updates, as changes could mean a generous uptick in your home loan borrowing power.

What it could mean for you

Having a HECS/HELP debt, or any other student debt, shouldn’t discourage you from exploring your home loan options if you’re keen to buy.

Get in touch to find out your borrowing power and discover if you’re home loan-ready today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Australian property prices are expected to continue their upward trajectory, with units outpacing houses for the first time, according to KPMG's Residential Property Market Outlook.

The national housing market is forecast to see house prices rise by 3.3% in 2025, followed by a more substantial 6% increase in 2026, while unit prices are predicted to grow by 4.6% and 5.5%, respectively.

Perth leads the house price growth forecast for 2025 at 4%, while Sydney is expected to dominate in 2026 with a 7.8% increase. The shift towards units reflects growing affordability constraints in capital cities.

KPMG Chief Economist Dr Brendan Rynne, said the market has shown remarkable resilience despite challenging conditions.

"While 2024 was a year of high interest rates and inflation and subdued consumer sentiment, the housing market withstood all those factors and still provided strong price growth, due to demand outstripping supply," Dr Rynne said.

The report indicates that building approvals are improving, though the translation into actual housing completions will be limited in 2025 and 2026 due to inherent time lags in the construction process.

For renters, some relief may be on the horizon. Rental growth is expected to moderate to between 3.5% and 4.5% over the next two years, down from the peak of 7.8% observed in March 2024.

The market's performance has aligned closely with previous forecasts, with 2024 seeing house prices rise by 5.1% and units by 4.5%, nearly matching KPMG's earlier predictions of 5.3% and 4.5% respectively.

"Despite affordability and availability issues and a delayed interest rate cut, increased investor sentiment, and anticipated relaxed lending conditions will help support modest price growth in 2025, and then stronger growth next year," Dr Rynne said.

He said that the anticipated interest rate cuts starting in the second quarter of 2025 would likely accelerate price growth in the latter half of the year.

"A downward shift in rental prices will help restrain property growth. The high rents in recent years have pushed more renters to look to buy instead which has added to demand and hence prices," Dr Rynne said.

"This is one of the factors we see contributing to a more balanced and sustainable rate of price growth over the next one to two years, and more aligned with long-term averages."

Great news for home owners – plenty of economists are tipping an RBA rate cut for February. Assuming it happens, once the celebrations have died down, what next? We explain what to expect when rates head south.

It’s been a long time between drinks for home owners celebrating a rate cut. The last time the Reserve Bank of Australia (RBA) gave rates a chop was back in 2020.

But the tide may be about to turn. A growing chorus of economists – plus banks including NAB and Westpac – are expecting a rate cut of 0.25% when the RBA board next meets on February 17-18.

Of course, nothing is set in stone.

If we do see rates head lower though, it’s worth knowing how your home loan and repayments could be impacted.

What will happen to my loan rate?

If you have a fixed-rate home loan, it’s business as usual no matter what happens to the cash rate. Your fixed rate won’t change and neither will your required monthly repayments. That said, if you’re coming to the end of a fixed term, it’s worth having a chat with us about your next moves once the fixed rate expires.

The real action occurs if you have a variable rate home loan. If the RBA cuts the cash rate, your variable home loan rate should fall too.

By how much? 

Well, banks don’t have to follow the cash rate. And history has shown that lenders haven’t always passed on rate cuts in full.

But banks may want to avoid potential backlash, especially given the current cost-of-living climate. That would hopefully see most lenders pass on 100% of any rate cut. So, if the RBA cuts rates by 0.25%, your home loan rate should hopefully drop by 0.25% also.

How do you find out the new rate? 

Your lender will get in touch to let you know.

Will my repayments change if rates fall? 

Not necessarily. Some lenders automatically reduce home loan repayments in line with rate cuts. Other banks, however, simply maintain your repayments at the old level. It’s just that more of your money goes towards paying off the principal (rather than the interest) each month.

This can be frustrating if you’re hankering for some extra money for your family budget each month. However, some banks take the view that by maintaining your old repayments, they’re helping you pay more off the loan and get ahead with your mortgage.

To find out if your bank is automatically dropping your monthly repayments, or if you need to request for it to happen instead, get in touch with us and we can let you know.

How much might your mortgage repayments decrease?

• For an owner-occupier with a 25-year loan of $500,000 paying principal and interest, a 25 basis point rate cut means your monthly repayments could decrease by about $77 a month. That would put $924 a year back into your family budget.

• If you have a $750,000 loan, your monthly repayments would likely decrease by about $115 a month – or $1380 per year.

• Meanwhile, a $1 million loan would decrease by about $154 a month – or $1848 a year.

Worried about your mortgage? 

Get in touch. Despite a potential rate cut on the horizon, there are still plenty of households around the country feeling the pinch of cost of living pressures and high interest rates.

If you fall into that category and haven’t had a home loan health check in a while, get in touch to see if you could be doing better on your home loan.

Some options we can help you explore include renegotiating with your current lender, refinancing to another lender, or debt consolidation.

Every household is different – we’d be more than happy to help you come up with a tailored plan for yours.

The Australian Federal Government has unveiled its ambitious ‘Help to Buy’ scheme, designed to make homeownership more accessible for low and middle-income Australians through a co-purchasing model.

The initiative, set up to support 40,000 buyers over the next four years, aims to address the growing housing affordability crisis. Under the scheme, the government acts as a silent partner in the home purchase, easing the financial load for buyers.

The scheme allows eligible Australians to purchase property with the government contributing up to 40 per cent of the purchase price for new homes and 30 per cent for existing properties. Buyers can enter the property market with as little as a 2 per cent deposit, and unlike traditional co-ownership arrangements, no interest is charged on the government’s stake.

The government’s stake is repaid when the property is sold or when the buyer is ready to purchase the government’s share outright. For example, a buyer purchasing a $500,000 home with a 40% government contribution would need to borrow just $300,000, substantially reducing their mortgage repayments. This will significantly reduce mortgage burdens, the Government claims.

The scheme also includes location-specific price caps to ensure fairness across the country. In New South Wales, for instance, the Help to Buy price cap is $950,000 for homes in capital cities and regional centres, while in Queensland, the cap is $700,000. Eligibility is limited to Australian citizens aged 18 or older who earn less than $90,000 individually or $120,000 combined as a household. Applicants cannot own property in Australia or overseas at the time of applying.  

While the scheme provides significant support, buyers must also consider that any increase in property value will see the government’s equity share grow accordingly. For example, if the government owns 30 per cent of a property and the home’s value increases by $100,000, the government’s share grows by $30,000. Buyers should also be aware of annual reassessments of their financial capacity and the property’s value, which could affect their eligibility.  

The Help to Buy scheme will roll out at different times across the country. Buyers in the Northern Territory and the Australian Capital Territory can access it immediately, while other states require legislative changes before it can begin. The government aims to assist 10,000 buyers annually, gradually expanding access to support more Australians.

Amid growing expectations of rate cuts in 2025, sticking with a variable home loan rate can seem like a no-brainer. But not so fast. Locking in your home loan rate can also have upsides, including the potential for a lower rate right now.

Home loans come in all shapes and sizes. A common thread is that you’ll likely be given the choice of a variable or fixed interest rate.

It’s an important decision, as fixed rates can be very different from variable rates – and right now, some lender’s fixed rates are lower than their variable rates.

Let’s take a closer look at both options.

Variable-rate home loans

With a variable-rate loan, the rate you pay can move up or down in line with market interest rates.

If the Reserve Bank of Australia (RBA) raises the official cash rate, for example, your loan rate will almost certainly rise, which in turn increases your repayments.

Conversely, if the cash rate falls, your variable rate should also drop, which would result in lower monthly repayments.

The upshot is that you need to be prepared for your home loan interest rate (and repayments) to rise or fall during the course of your mortgage.

In exchange for this uncertainty, variable rate loans tend to offer more flexibility and features.

These can include a redraw facility, linked offset accounts, and being able to make fee-free extra repayments, all of which can make your home loan easier to live with and help you pay off the balance sooner.

Fixed-rate home loans

When you fix your home loan rate, the interest rate stays the same regardless of changes to market rates.

This means you know exactly what your repayments will be throughout the term of the fixed rate period (usually one to five years), which can help make household budgeting easier.

If market rates rise, you’re in front because your fixed rate won’t be affected.

The downside is that if interest rates fall, you won’t get the benefit of lower repayments.

The good news is that today’s fixed-rate home loans are generally more flexible than in the past.

Some allow extra repayments (often up to an annual limit) plus redraw. Others even provide offset accounts.

Even so, one issue to be aware of is ‘break’ fees.

These can apply if you bail out of a fixed-rate loan before the fixed term ends – something that may happen if you want to refinance to a lower interest rate loan sooner than you originally planned.

Break fees can be complex. But if interest rates have dropped since you fixed, you could be up for significant costs, potentially running into tens of thousands of dollars, which could wipe out any savings from refinancing.

This highlights the need to talk to us before locking in a fixed rate so you can make an informed choice.

Do fixed-rate loans come with higher interest rates?

This is where things get interesting.

Right now, fixed rates can actually be lower than variable rates, depending on the lender.

This is likely because some banks believe that the RBA may cut the official cash rate (perhaps several times) over the next couple of years, so they’re pricing this into their fixed rate options to make them more enticing.

Macquarie Bank, for instance, has a 2-year fixed rate of 5.69%, well below its 6.14% variable rate.

Whether the RBA cuts the cash rate, how many times it cuts it, and how soon all determine whether or not you come out ahead by fixing now.

A split rate loan – have your cake and eat it too

There is one possible way to enjoy the certainty of a fixed rate and the flexibility of a variable rate: a split rate loan.

This lets you divide your loan between a fixed rate and a variable rate. For example, 40% of your mortgage could be accruing interest at a fixed rate and the remaining 60% could be charged at a variable rate.

You get bragging rights about the lower fixed rate you’re paying, plus the features of a variable rate loan.

It’s a bit like hedging your bets, with some additional benefits.

Want to know more?

Still not sure which option might suit you?

Contact us today to find out more. We don’t have a crystal ball, but we can sit down and work out what’s important to you – and then which of the above options aligns with those needs.

There’s much more to property in Australia than just houses or units. And if you’re in the market for a home or investment property, it helps to know your townhouses from terrace homes so that you can choose a place that’s suited to your goals and needs.

Australians are blessed with choice when it comes to buying a family home.

Nationally, Australia has 10.9 million private dwellings.

The sheer scale of properties points to a wide variety of housing types to suit different budgets and lifestyles.

So, it can pay to cast your net wide.

With this in mind, let’s take a look at the main types of housing you can choose from.

Houses – freestanding, semi or terrace?

Houses dominate the property scene in Australia, accounting for a whopping 70% of the nation’s private residences.

But not all houses are the same.

‘Detached’ houses are freestanding, or standalone, residences.

That’s quite different from semi-detached houses, which share a common wall with a neighbouring home – something often seen in rows of terrace houses, typically dating from the 19th and 20th century.

The pros of houses: houses have historically shown a higher rate of capital growth than other types of residential property.

The cons of houses: houses often come with a price premium over apartments.

As a guide, the median price for a house nationally is $879,680, compared to $669,700 for apartments.

Apartments

Apartment living has gained a big following in recent years, with one in six (16%) Australians calling an apartment ‘home’.

And they continue to grow in popularity.

Realestate.com.au says searches for apartments have been trending upwards since mid-2020, accounting for almost 40% of all ‘buy’ searches in late 2024.

The pros of apartments: part of the appeal of apartments is affordability. However, they can also offer the advantage of low-maintenance living (think no lawns to mow each weekend).

The cons of apartments: one thing to watch out for is strata levies. These cover the cost of building maintenance and repairs, and newer developments with more facilities can come with higher strata fees.

Townhouse or villa?

Not keen on an apartment, but looking for something more affordable than a house?

The solution could be a townhouse or villa.

Townhouses make up 13% of dwellings across Australia. They typically have two storeys while a villa is usually a single-storey home.

The pros of townhouses: the small garden or courtyard space associated with townhouses and villas can offer residents more private space.

The cons of townhouses: both townhouses and villas are part of a strata scheme, which makes it worth keeping an eye on strata fees.

Duplexes

Duplexes can tick a bunch of boxes. They’re a modern version of a semi-detached house, often with two adjoining homes constructed on a larger block, connected by a single wall.

While duplexes are less common than houses or apartments, they have the potential to let you buy a home for almost half the price of a regular house.

The pros of duplexes: a duplex can combine the privacy of a house with the affordability and low maintenance of a townhouse or villa.

The cons of duplexes: according to REA Group, owners of both duplex homes must agree to a building insurance policy that covers both sides of a duplex. This is something to look into before buying.

Talk to us to find out what you can afford

The type of property that’s right for you is a very personal decision.

What you are able to buy can be shaped by both personal preference and your borrowing power. And more often than not, trade-offs and compromises occur.

Call us today to know how much you can afford to borrow. It could shape your choice of home.

As we head towards the end of 2024, let’s take a look at how property markets performed over the last year – and discover what the experts say may lie in store for home prices in 2025.

2024 has been a year of change, with property values and market conditions shifting across many of our state and territory capitals.

In fact, the only constant has been the Reserve Bank of Australia’s cash rate, which has held steady at 4.35% since November 2023.

After a year that saw home values rise nationally by 5.5%, according to CoreLogic, it’s worth looking at what we can expect in the new year.

The Australia-wide picture

November 2024 saw home values rise nationally by a barely perceptible 0.1%.

Technically speaking, it’s the 22nd straight month of growth since January 2023. But realistically, 0.1% hardly qualifies as a cracking pace of growth.

Quite simply, CoreLogic says the market is losing steam, and a downturn is gathering momentum – particularly in Melbourne and Sydney.

That’s good news for buyers who may be able to take advantage of softer price growth in 2025.

However, in a market as large and diverse as Australia, it pays to drill down to local trends.

With this in mind, let’s take a look across our major capital cities.

Queensland

Brisbane home prices have climbed 12.1% over the past year. Can the growth be maintained? Maybe, though perhaps not to the same extent. Domain is predicting price growth ranging from 5-7% for houses, and 7-9% for apartments in 2025.

New South Wales

Sydney is up 3.3% over the past year and likely hit a cycle peak in August. Home values have flattened or fallen ever since, says CoreLogic, with the city’s median home price of $1.2 million proving an affordability challenge. Domain is predicting a 4-6% rise in home values through next year.

Victoria

Melbourne took out the wooden spoon for property price growth in 2024, recording a 2.3% fall in prices over the last 12 months. The new year could bring a change of pace. Domain predicts house values could rise 3-5% in 2025 though apartments are expected to drop by up to 2%.

Australian Capital Territory

Home prices in Canberra have barely budged in 2024, declining by just 0.1% in the past 12 months. Domain is taking an optimistic view, expecting house values to rise by 3-5% next year, while unit values could drop by up to 4%.

Tasmania

Hobart values fell 1% in the year to November, bringing the total falls to 12.1% since the market peaked in March 2022. However, more affordable prices plus generous stamp duty reforms launched in mid-2024 could make 2025 a big year for first home buyers in Tassie.

South Australia

Home values in Adelaide have jumped 14% over the past year. However, CoreLogic says Adelaide’s 2.8% rise in values over the past three months was the lowest since June 2023. Even so, there may be plenty of steam left in the market, with Domain forecasting a 7-9% rise in prices in 2025.

Western Australia

Perth has seen home prices soar 21% over the past 12 months. But with listings up 33% in November, CoreLogic says the pace of price growth is slowing. Domain is expecting prices to rise by a more modest 8-10% next year – still nothing to sneeze at.

Northern Territory

Prices in Darwin have barely budged this year, mustering up just 0.9% growth over the past 12 months. Next year may be better. SQM Research is predicting home values in Darwin could rise anywhere from 3% to 10% in 2025 depending on interest rates and population growth.

The property investment landscape in Australia is experiencing a significant shift, as Queensland approaches Victoria's position as the second-largest investor market in the country.

New data from Money.com.au reveals Queensland has captured 23 per cent of all investor loans in the past year – nearly matching Victoria's 23.3 per cent share – and showing remarkable growth from its previous position.

Queensland's investment appeal is evidenced by a 14 per cent year-on-year increase in average investor loans. This figure now sits at $560,104, significantly outpacing Victoria's modest 5.3 per cent growth to $563,632.

Money.com.au's Research & Data Expert, Peter Drennan, said the shift is inevitable.

"There were 48,531 investor loans issued in Queensland, just shy of the 48,812 loans issued in Victoria, and the odds are that these numbers will flip next month and put the Sunshine State ahead," Mr Drennan said.

The state's strong performance is particularly notable in its 36 per cent year-on-year growth in total investor loans, which is almost double the national average of 21 per cent.

Home Loans Expert, Mansour Soltani, attributes this growth to multiple factors.

"Queensland has everything property investors look for including a strong local economy, population growth, expanding regional markets and ongoing infrastructure projects," Mr Soltani said.

Regional areas are proving particularly attractive, with markets such as Townsville, Bundaberg and Gladstone offering affordable entry points around $500,000 and potential rental yields of 5-10 per cent.

The state's growth extends beyond just investor activity, with owner-occupied loans growing by 12 per cent year-on-year, while other markets struggled to achieve similar results.

Property prices have reached record highs in the major capitals, but experts say the market may be turning in favour of buyers.

The latest Domain House Price Report shows record highs in cities like Perth, Adelaide, Brisbane and Sydney. Perth led the way with a 25.3% annual increase, followed by Brisbane at 14.8% and Sydney at 6.1%.

Despite these highs, growth rates are slowing due to affordability constraints and the cost-of-living crisis. Sydney and Perth’s quarterly growth halved, while Brisbane’s rate fell by a third. Even Melbourne and Canberra saw slight declines too.

With new supply at its highest since March 2022, properties are staying on the market longer and negotiation opportunities are increasing, signalling a shift toward a buyers' market.

Australia's rental market is showing early signs of relief, with rental price growth slowing and more properties entering the market, according to new research.

PropTrack said that annual rental growth slowed in September and is now increasing at half the rate of last year. Despite this, annual growth still outpaced inflation, making affordability tough for renters.

Capital city rents rose 6.8% annually to reach $640 per week, while regional areas experienced stronger growth at 8%, with rents at $540 per week.

While supply improved, with new listings up 8.6% year-on-year, the vacancy rate remains tight at 1.3%, suggesting there are still ongoing demand pressures.

PropTrack said that while more renters may transition into homeownership, rental market conditions remain strained, and rents are likely to keep rising.

With just one RBA rate decision left for 2024, homeowners may be holding onto hopes of a summer cut. We look at when rates may start falling – and how you could possibly give yourself a rate cut before Christmas.

“Are we there yet?” It’s the catch cry of kids on long summer road trips, and it could just as easily apply to homeowners waiting for much-anticipated rate cuts.

The good news is that we appear to be getting closer – with many banks forecasting a possible RBA rate cut by the end of summer.

Rates on hold for November …

The Reserve Bank of Australia (RBA) kept rates on hold in November, despite inflation falling to 2.8%, which is well within the RBA’s preferred 2-3% inflation range.

So, what’s holding up rate cuts? And why does it seem like the goalposts keep shifting?

It turns out the RBA is concerned that part of the decline in inflation “reflects temporary cost of living relief” (think the $300 power bill credit). Basically, the RBA is worried that inflation remains too high and the outlook is still a little too uncertain to make any rate cuts right now.

Banks expect rates to fall in early 2025

What the RBA is aiming for, is “sustainably returning inflation to target” (that’s the 2-3% band). And it cautioned this could still be a way off. That makes the chances of a festive season rate cut at the RBA’s next meeting (December 10) unlikely.

For the record, RBA Governor Michele Bullock didn’t give any hint on the direction of interest rates – either up or down.

The banks, however, are a lot more open – and optimistic – about their interest rate expectations.

• The Commonwealth Bank, which had previously tipped a December rate cut, is now pencilling in the following meeting (February 18) for the first of what could be a string of rate cuts.

• Westpac, ANZ and AMP also all anticipate the RBA to cut the cash rate as early as February, while NAB is forecasting a rate cut as early as March 2025.

Why wait? Variable rates are already falling

While all this may make for a happy new year, February may seem a long way off – especially if you’re sweating on a rate cut (and remember, there are no guarantees).

But you may not have to wait around for the economy or the RBA to shift in your favour. It could be possible to give yourself a rate cut in time for Christmas.

According to studies, growing expectations of future rate cuts have seen a number of lenders take the knife to their variable rates, with some cutting their variable rates below the 6% mark.

This may be helping to drive a 2.1% uptick in the volume of home loans being refinanced over the past month.

The Victorian Government has introduced a new temporary off-the-plan land transfer duty concession, effective from 21 October 2024 for a period of 12 months. This concession aims to stimulate the off-the-plan property market and provide relief to purchasers.

Key Points:

• Eligibility: Applies to off-the-plan purchases of dwellings (apartments, townhouses) within strata subdivisions.

• Benefit: Purchasers can deduct construction costs incurred after the contract date from the dutiable value of the property.

• Who Can Benefit: All purchasers, including investors, companies, and trusts.

• Timing: Eligibility is based on the contract signing date, not the settlement date.

• Foreign Purchaser Additional Duty (FPAD): The concession does not apply to FPAD.

Impact on the Melbourne Property Market:

This new concession is expected to have a positive impact on the Melbourne property market, particularly the off-the-plan sector. Here's how:

• Increased Demand: By reducing the upfront costs for purchasers, the concession may encourage more people to consider off-the-plan purchases.

• Stimulated Construction: Increased demand for off-the-plan properties can lead to more construction projects, boosting the construction industry and creating jobs.

• Affordability: The reduced duty costs can make off-the-plan properties more affordable for both owner-occupiers and investors.

• Investor Interest: The concession may attract more investors, particularly those who are not eligible for other first-home buyer concessions.

However, the long-term impact on the market will depend on various factors, including overall economic conditions, interest rates, and future government policies.

It's important to note that while this concession can be a significant benefit, potential buyers should carefully consider their financial situation and consult with professionals before making a decision.

New government fees are threatening to derail housing development in Newcastle. A report by the Property Council of Australia has warned that the fees will lead to a shortfall of 12,000 homes in the region.

The fees in question are the Housing Productivity Contribution (HPC) and water authority Development Servicing Plans (DSPs). The Property Council is calling for a temporary suspension of the fees in order to get housing development back on track.

The impact of the fees is being felt by developers, who are now having to factor in the extra costs when calculating the viability of projects. This is leading to some projects being shelved, and others becoming too expensive for many buyers.

The Property Council is urging the government to reconsider the fees, arguing that they are having a negative impact on housing affordability. The council is also calling for a more collaborative approach to housing development, with all stakeholders working together to find solutions.

Australia’s office markets are showing positive signs, with declining vacancy rates in the first half of 2024 according to Colliers.

This improvement is driven by a halt in new supply in cities like Sydney and Brisbane, combined with strong leasing activity as occupiers seek higher-quality office spaces. 

Notably, Sydney and Melbourne CBDs have seen increased relocation opportunities, boosting Q2 leasing activity by 10% compared to the previous year. 

Looking ahead, the limited supply will impact the recovery of office markets beyond 2024. 

From 2025, new supply is expected to be scarce, with only 254,200 sqm of additions forecasted, 60% below the 10-year annual average. 

High construction costs and challenging pre-commitment levels contribute to this scarcity. 

This lack of new supply is anticipated to tighten vacancy conditions, particularly for prime-grade office spaces.

National rents remained unchanged last quarter, with the median weekly rent holding steady at $600 per week.

According to PropTrack, while national rents remained unchanged over the past three months, they are still 9.1% – or $50 higher – over the last 12 months.

At the same time, the national rental vacancy rate rose to 1.4% in June 2024, up from 1.1% 12 months ago.

Additionally, capital city rent growth (up 10.3%) outpaced regional markets (up 8%) over the past year, with weekly rents reaching $640 per week in the capital cities and $540 per week in the regions.

Meanwhile, houses currently have a lower vacancy rate (1.1%) compared to units (2.1%).